Also see the City budget.
Allegheny County budget dealings.
Onorato says gaming revenue plugged budget gapEdit
- January 17, 2008, By Karamagi Rujumba, Pittsburgh Post-Gazette
In the midst of heated debate with Allegheny County Council's Republican members on Tuesday, Chief Executive Dan Onorato said he would not apologize for receiving $19.9 million in state gaming revenues.
Mr. Onorato told council that if the county had not fortuitously received the first installment from a slots-financed state economic development fund on Dec. 31, he would have used the county's fund balance of about $17 million to plug the 2007 budget deficit.
That would have left the county with little or no reserves going into this year, a perilous financial situation that could have caused a downgrade of the county's bond rating.
After debate over the gaming revenue and a renewed quarrel over the new drink and rental car taxes, council Republicans said Mr. Onorato and his administration never told them the severity of the situation.
Mr. Onorato and his administrators disagreed, as did the Democratic president of County Council, who said all members knew how tight the county's finances were.
"We didn't know that was the case. We were led to believe that when we sold the tax liens we would balance the 2007 budget. I didn't know that we were only halfway there," said Councilman Vince Gastgeb, R-Bethel Park, chairman of council's GOP caucus.
"We were all aware of the county's financial problems and we knew that all options would be on the table, including the fund balance," said council President Rich Fitzgerald, D-Squirrel Hill. "Our objective now should be to go to Harrisburg and try to find a solution for our revenue problems."
Temporary budget fixes like the sale of tax liens or relying on gaming revenue "is how the city of Pittsburgh got itself into receivership. We should be looking for a steady stream of new revenue," he said.
Council Republicans argued Tuesday that the $19.9 million in state funds made the new drink and rental car taxes unnecessary. The taxes were enacted to cover the county's $30 million subsidy of the Port Authority.
Democrats disagreed, and beat back the GOP effort to repeal the taxes.
Yesterday, county Manager Jim Flynn said that all council members were briefed about the county's deficit, and knew the tax lien sale was projected to yield about $15 million, well short of the projected $35 million deficit in the 2007 budget.
If the $19.9 million payment from the state didn't arrive Dec. 31, Mr. Flynn said, the administration would have had to tap the fund balance, which hovers at $17 million to $18 million, to balance the 2007 budget.
"But at no time was it probable in our minds that we were going to completely eliminate the fund balance," he said. "All we were going to do was use part of it."
He said it was not unusual for the county to use its fund balance to erase deficits.
He said Mr. Onorato's Republican predecessor, Jim Roddey, used the fund balance in the last two years of his administration to cover more than $30 million in deficits. Karamagi Rujumba can be reached at email@example.com or 412-263-1719. First published on January 17, 2008 at 12:00 am