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County balances budget without tax increase

Friday, December 11, 1998

By John M.R. Bull, Post-Gazette Staff Writer

The ruling Allegheny County commissioners yesterday declared "victory" in what has been an annual tussle to control county finances, unveiling a balanced 1999 budget that doesn't include a tax increase.

"We balanced the budget. We eliminated the deficit, and we are maintaining the tax cut" of 20 percent that the county instituted in 1996 and which the county has struggled to pay for ever since, said commission Chairman Mike Dawida.

Dawida and Commissioner Bob Cranmer yesterday released the $750 million proposed budget amid fanfare and chest thumping.

They claimed they "retrieved the county from the brink of fiscal disaster" and made permanent changes that should allow balanced budgets in future years as well as next year.

The two commissioners -- who have been running the county together the past two years -- also claimed credit for the 1996 tax cut, slashing 1,000 jobs from the payroll since then, and balancing this year's budget by cutting expenditures and not relying on one-time, quick-fix revenue producing maneuvers, such as last year's decision to sell the county's tax liens to a private collection company.

"The government is more efficient. Government is cheaper. Things are moving forward," said Cranmer. "This is a strong, vibrant government."

The proposed budget is almost $30 million larger than last year's budget, but the extra expenditures are expected to be covered by increased state and federal aid.

"This is not speculation," said Dawida. "This is firm."

The third commissioner, Larry Dunn, -- who often votes against Cranmer and Dawida -- called the proposed budget "smoke and mirrors" and said he wouldn't vote for it. Only two commissioners need to approve the budget.

Dunn said the ruling commissioners are balancing next year's budget through dangerous assumptions that state and federal matching grants for various programs will be increased $27 million, and by relying on a court-ordered 2 percent increase in property assessments, which are the basis for computing a homeowner's tax bill.

Dunn had led the charge in 1996 to freeze property assessments, but Allegheny County Judge Stanton Wettick ruled that was not legal. Wettick ordered the 2 percent increase in assessments, which will result in increased tax payments by homeowners to the county next year of roughly $5 million.

As a result of Wettick's ruling, Dunn charged that Dawida and Cranmer were accepting a defacto tax increase and challenged them to enact a tax cut next year to offset that additional revenue.

Dawida noted it was that kind of thinking by Dunn in 1996 that put the county in a deficit it has struggled to overcome ever since, a deficit which has resulted in several reductions in the county's bond rating by Wall Street.

"When Larry Dunn was chairman, he ran us into a deficit. We're out of that now. I think that speaks for itself," said Dawida.

All three commissioners plan to run next year for the county chief executive position.

The proposed budget cuts funds for most departments controlled by the commissioners, but grants modest increases to the row offices and the courts.

The budget does not tap into an expected year-end surplus of roughly $21 million, which is a low figure for a government the size of Allegheny County.

Previous figures had estimated the surplus to be almost $59 million, but Budget Director Carmen Torockio yesterday said that didn't include several large payments owed, but not yet made. The real surplus should be $20.9 million, he said.

"The budget we have put together for 1999 is extremely lean," Torockio said. "It's difficult, but makeable as long as we continue stressing cost savings throughout the county."

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