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SCHENECTADY COUNTY
Towns seek bigger sales tax share Agreement to divvy up revenue set to expire
BY MICHAEL LAMENDOLA Gazette Reporter

    A four-year agreement that distributes at least $67 million in sales tax receipts annually among municipalities in Schenectady County will expire Nov. 30, and political leaders are already jockeying to get a larger piece of the pie or to at least preserve what they have.
    “I would like to see the towns get a bigger share, but I don’t think that will happen, seeing that the county is facing its own woes,” said Duanesburg Supervisor Rene J. Merrihew, a Republican.
    Supervisors of the five towns in the county may present a counterproposal during negotiations, in hopes of obtaining additional sales tax receipts, said Glenville Supervisor Frank Quinn, a Democrat.
    “We would like to see more, just like everyone else. We are looking to see how we are doing. Are we underachieving? Are we overachieving? Those who are organized seemed to be doing better than others,” Quinn said.
    The main players in the negotiations are the county and the city. Under state law, the city may impose its own sales tax, limited to 1.5 percent, and the county can impose an additional sales tax of 2.5 percent on top of this. The state takes 4 percent from a total of 8 percent.
    Up until 1988-89, the city had its own sales tax, which generated $9 million annually. Towns and villages cannot institute their own sales tax.
    The city and county could keep all proceeds for themselves from their sales taxes, but have instead since 1990 worked together to distribute receipts to the other municipalities.
    The current agreement guarantees the city receives no less than $11 million annually in sales tax, that the county receives no less than $50 million and that the towns and villages receive no less than $7.8 million.
    The towns and villages receive their share of sales tax based on a formula that uses their total assessed value. Quinn would like to abandon this formula for something else, he said.
    The towns and villages receive another $3 million annually under a deal that funds the Metroplex Development Authority with a slice of sales tax receipts.
    Mayor Brian U. Stratton said the city has begun informal talks with the county over a successor agreement. He would not comment further.
    County Majority Leader Gary Hughes, D-Schenectady, said he is looking to strike an agreement that “is fair to the county, is fair to the city and towns and is fair to taxpayers. How we get there and the specifics are yet to be determined.”
    “We have more needs and less reimbursement from the state. So sales tax looms out there as an important source of revenue,” Hughes said.
    The county is facing serous fi scal problems, and County Manager Kathleen Rooney is expected to present a budget Wednesday that will contain a tax hike and program cuts. As such, the county is looking to protect all its revenue sources.
BIG HITS
    Sales tax is an important revenue source for all municipalities in the county and any reduction would have serious fiscal consequences. Merrihew, for example, is already anticipating that 2009 will be a bad year for sales tax receipts because of economic conditions and has adjusted her budget accordingly.
    “I reduced our sales tax amount by 9 percent, just in case,” Merrihew said. “Between the loss in mortgage tax and sales tax revenues, I cut $90,000 in our total budget, which is roughly $851,000.” She said she is balancing the budget through cuts and the use of surplus funds.
    As such, Merrihew wants to maintain the status quo. “As long as they don’t take it away, I would be happy if they left the formula the same,” she said. “I am grateful for it, because I understand it is one of those bargaining things. They don’t have to provide any money to the towns.”
    In Glenville’s case, sales tax receipts from the county represent 20 percent of the town’s $10.5 million budget, Quinn said. He said the town’s share of sales tax receipts has remained flat over the last three years while expenses have increased. “We are killing the homeowners with taxes here,” he said. The town received $896,583 in 2006 and $861,349 in 2007. It has budgeted $836,349 for sales tax receipts in 2008.
    Niskyauna Supervisor Joe Landry said the growth in sales taxes has not kept pace with the growth in his town’s budget. His budget grew 9 percent this year, he said.
    Schenectady City Finance Director Ismat Alam said the city’s share of sales tax receipts has remained flat, at $11 million, over the course of the agreement. The receipts go into the city’s general fund.
    Under the current agreement, the county retains no more than 60 percent of the local sales tax receipts — less what goes to the Metroplex — up to a threshold of $83.5 million. The county has yet to hit the $83.5 million threshold.
    When officials signed the current agreement in 2004, they thought the county would see a gradual increase in sales tax receipts, resulting primarily from economic development projects initiated by Metroplex, and that the county would hit the threshold in 2007.
    According to the state Department of Taxation and Finance, the county collected $81.1 million in 2007 — the highest collected to date during the agreement. In 2004, it collected $76 million; in 2005, $79 million; in 2006, $67 million.
    The county has collected $56 million through August of this year, averaging about $6.9 million a month in receipts. If the average holds true, the county will collect some $83 million by the end of the year.
    County Legislator Vincent DiCerbo, D-Schenectady, would like to see negotiations also focus on developing ways to consolidate services, as a means to reduce the cost of government. “We have done some consolidation of services, but need more, comprehensive consolidation. For every town to have its own highway department just doesn’t wash,” he said. “We can use the agreement as leverage to seek consolidation.”

I was told a few weeks ago by some high up demos that Rott will get less because the town people failed to put demo people on the board and super position last time

Sal, that wouldn't surprise me.  

Rene, I agree that the towns should get more of a cut of what comes from the tax.  

Personally, as I have stated before, I believe whatever is collected in each municipality should go to that municipality.  Nothing against the small towns, but they have decided at one point or another, one way or another, to stay as small towns.  They shouldn't expect to get the help from the other parts of the communities.  People go to the businesses where they are built.  Businesses are built where they are invited.  I do see that Duanesburg and Delanson are becoming more inviting and are now able to have some areas (7 & 20, I think it was) where the Metroplex is willing to pitch in and give some money to help strengthen some of the businesses and I hope that it does stimulate the economies of both Duanesburg and Schenectady County.  It can use all the stimulation it could get.

Actually the formula takes the size and value of property of the town into account.  For example in 2007 which is the last full year for figures Duanesburg received $493,423.57 in sales tax revenue.  How much did Rotterdam receive?  Substantially more I'm sure.  I'll say it again.....where do you think our residents shop and do business?  Rotterdam, Schenectady?  Yes, which means we are contributing to the county sales tax.  

I'll have to look around.  I'd really like to know this split.  I will try to jump around and find some information.  Maybe I'll even contact some people at the county level to see if I can find the information that I want / need to make my determination on how this is going.

Equalization rates.......