EC Legislature Approves Borrowing Power for Comptroller

If needed, Mychajliw has power to borrow $125M

Brendan Keany
March 26, 2020 - 3:33 pm
Erie County Legislature

(WBEN Photo/Brendan Keany)

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BUFFALO (WBEN) - In a 10-1 vote, the Erie County Legislature gave Comptroller Stefan Mychajliw the authorization to go to market and borrow $125 million if the county were to need it.

However, county officials want to be clear that the county is in good financial standing right now, and this is simply a pre-emptive move.

"We are not going to borrow $125 million in the short term to get through this very, very difficult time," said Mychajliw. "Right now, we have about $235 million in cash within the walls of Erie County government - we are going to be fine until roughly June."

Mychajliw's office released information to the legislature regarding the anticipated heavy loss of sales tax revenue - the single highest source of revenue for Erie County.

"Depending on how much sales tax drops in the next few months, that up until June, if it drops 10%, we're looking at a $16 million hole in the budget, and if it drops 50% up until June, we're looking at a loss of $80 million in revenue," Mychajliw continued. "Thankfully, we are in incredibly good shape right now from a fiscal perspective in Erie County government where we are not panicking, we are not making drastic Draconian cuts, but we do have to keep a very close eye on finances moving forward."

Minority Leader Joe Lorigo ultimately decided to vote in favor of the authorization, but he wasn't particularly pleased about the process.

"I support the measure of giving the comptroller the ability to go out to the market and borrow - it's something we do every year virtually - and it's his decision on when we borrow, how much we borrow and what we need," said Lorigo. "My concern was that we called this special session today when we weren't supposed to be here, and I think that sends the wrong message to taxpayers in Erie County that we're running out of money when we're not."

Listen to Lorigo's full comments below:

Of course, there's also the $2 trillion stimulus package to consider, if and when that eventually passes. Mychajliw says it appears Erie County would be the recipient of $159 million from the federal stimulus bill because it impacts counties with populations of 500,000 or more.

"The $159 million has to be spent on Covid-related expenses," said Mychajliw. "Can we make an argument to the federal government that the loss of sales tax revenue is a coronavirus-related impact? We might - it all depends on what the federal government allows.

"As we always have, we're going to keep a close eye on county finances," Mychajliw added. "To the taxpayers of Erie County, right now, we're in very sound financial shape. If we need to borrow in the short term $125 million, we'll do so to keep county government afloat."

Listen to Mychajliw's full comments below:

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