Tonawanda legislators, Charles Swanick (D-Kenmore) and William Pauley, (R-Amherst) whose district includes a portion of Tonawanda, along with other Democratic county legislators, submitted a compromise plan to eliminate Erie County’s controversial real estate transfer tax.

According to sources in county hall, Mr. Giambra has substantially agreed to Mr. Swanick’s proposal to eliminate the tax by January 1, 2003.
The transfer tax, which is, among the 13 counties in Western New York, unique to Erie county, levies .05% on the sales price of real estate. For example, a seller of a $70,000 home pays $350 to Erie County.

Mr. Swanick, who led the fight to eliminate the tax, said it is “important” to Erie County, and particularly in his Tonawanda district, that this “unfair” tax is repealed.

“My district borders Niagara county, which does not have a county transfer tax,” Mr. Swanick pointed out. “It has been, at times, a topic of conversation with Niagara county legislators that the Erie County transfer tax gives Niagara County sellers, and builders, an advantage over Erie County.”

Although Mr. Swanick sought an immediate repeal of the tax, Mr. Giambra, initially opposed the idea, arguing that property taxes must be cut first.
Last week, Deputy County Executive Carl Calabrese told the News that the Giambra administration’s position is, that property taxes are “the most harmful tax. After we cut them we’ll look at (repealing) other taxes as well."

Mr. Swanick rebutted that it was possible to affect continued cuts in property taxes, and still repeal the transfer tax. He continued to lobby for the repeal, approaching Realtor groups and the public at town hall meetings, in an attempt to win support.
The county transfer tax revenue is budgeted at $6.019 million for the fiscal year 2000.
Mr. Swanick’s and Mr. Pauley’s resolution calls for:

** Effective January 1, 2001: to remove what has been called the “double taxation” portion of the levy, which mainly affects the construction and development of new homes.

(Frequently, when developers buy acreage, they subdivide the land into individual building lots, and sell to builders. In these cases, the tax is paid twice. When the builder sells to a home buyer, this transaction is taxed again. The resolution sates that developer/builders would pay the transfer tax only once per transaction. The specific details of this plan, as yet, remain to be worked out.
** Effective January 1, 2002 the transfer tax will be cut in half, reducing it from $5.00 (.05%) to $2.50 per thousand (.025%).
** Effective January 1, 2003: the tax will be eliminated.

Reaction from many Realtors and developers over Mr. Swanick proposal was enthusiastic. The Greater Buffalo Board of Realtors made several public statements praising both Mr Swanick and Mr Giambra.
“Realtors and investors who supported Giambra during the last election, got a surprising ally in Swanick,” said Real investor, Robin S. Milbrand. Of Tonawanda.
“I didn’t think the transfer tax would ever go away.”

During the 1999 election, in part because of local Realtors oft stated desire to repeal the county transfer tax, The Greater Buffalo Board of Realtors made a rare foray into local political races, and both endorsed Joel Giambra, and donated to his campaign, hoping to oust incumbent, Democrat Dennis Gorski, the author of the transfer tax in 1990.

Officials of the Giambra administration, calling for the elimination in phases, said that tax cuts in the neighborhood of 58 million are planned for 2001, and that the loss of an additional 7 million from the transfer tax, made the immediate repeal impractical.

Last year, Mr. Swanick led the county legislature to cut property taxes by 18% for 2000, and Mr. Giambra, and the Swanick-led legislature, have agreed to cut property taxes by another 12% in 2001, bringing total property tax cuts to 30% in two years.

Still Mr. Swanick insisted the county was strong enough to add the repeal of the transfer tax to the growing list of tax cuts.
"If you don’t remove a tax in the good times, you’ll never remove it in the bad times," Mr. Swanick said.

The fate of the repeal was in times in doubt during the last two weeks. At one point, Mr. Swanick appeared to have the necessary nine votes to support an immediate repeal, enough to pass it by a simple majority in the 17 member legislature.

However, Mr. Giambra threatened to veto the bill, and it appeared unlikely that Mr Swanick had the necessary 12 votes to override the county executive’s veto. Deputy County executive Carl Calabrese warned Democrats that since the transfer tax money is dedicated to road and bridge repair, an immediate elimination of the transfer tax would necessitate finding a corresponding cut in spending. "You can’t have it both ways," he said.

But some Democrats felt that with the increase in sales tax revenues, and a large county surplus, that the Republicans opposed the repeal merely to deny Mr. Swanick the credit for initiating the repeal.

With uncertainty about its fate, Mr. Swanick, Mr. Pauley, and others drafted a compromise measure which, according to sources, is almost certain to be supported by most, if not all, of the legislature, and have Mr Giambra’s whole hearted approval

Critics of Mr. Giambra have pointed out that the final elimination of the transfer tax will take effect in 2003, the year Mr Giambra is up for reelection.
“Joel has hijacked the whole issue,” said one Democrat at county hall. “Chuck Swanick initiated the repeal, but Joel stonewalled it. Now Joel can claim credit for repealing the transfer tax in 2003, when he is running for reelection, against, who knows, maybe Chuck Swanick.”

The language of the “compromise” resolution emphasized that the County Legislature recognizes the need to continue to reduce all taxes, including property taxes, which “seriously impact working families’ respective abilities to own, keep, and maintain real property in Erie County.”

Glen Gramigna contributed to this story.