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SCHENECTADY
Leaders at odds over revenues County, city officials feud on sales tax distributions
BY KATHLEEN MOORE Gazette Reporter

    The Democratic team members who ran under the slogan “working together works” just one year ago are now at each other’s throats over how to split up sales tax revenue.
    Councilman Mark Blanchfield said Schenectady County officials have threatened to take back every cent it gives the city unless the Schenectady City Council signs a new sales tax agreement on Monday.
    Blanchfield is playing hardball too. He’s spent weeks trying to persuade the council to reject the contract, and if his efforts fail, he plans to block the vote single-handedly with an obscure procedural rule at Monday’s 6 p.m. meeting.
    He said he thinks the county is pushing hard for the new agreement because it will otherwise be forced to give the city and the towns much more of the sales tax next year.
    Blanchfield says the county is trying to force the city to take the deal by threatening the loss of other aid: $200,000 for hazardous material operations, $125,000 for police officers, and $75,000 to operate the Central Park greenhouse.
    Blanchfield is so certain the city would gain money from a better sales tax deal that he says loss of the other money is worth the risk.
    “They’ve threatened to take those away. But you know, every year the Legislature could cut that, like they did this year,” Blanchfi eld said. This year the county cut the hazmat grant in half, to $200,000.
    At issue is a sentence in the sales tax agreement written more than a decade ago. At the time, the county and city agreed to share the sales tax with the towns at a flat rate each year. If the total collected tax exceeded a certain amount, every municipality would share in the extra. That’s never happened — but this year the county has come so close that some believe it will exceed the threshold.
    That would force it to give the city and towns additional revenue. But in the new agreement, which would take effect immediately, the city and towns would forever give up their right to share in any added revenue.
    In exchange, the city would get $25,000 more than the $11 million flat rate it gets now. For six years, the county would add another $25,000 to the total, upping the rate to $11.15 million by 2014.
    “That’s really not that much as the opportunity to grow it with sharing,” Blanchfield said. “That’s not much at all.”
    But County Attorney Chris Gardner said it’s better than nothing.
    “We may be on the verge of a Great Depression. Auto sales are down 35 to 40 percent. To have a guaranteed small growth is, I think, a good deal,” Gardner said.
    He argued that the county is unlikely to reach the point of having to share additional sales tax next year. But if it did, he said the county needs the money more than the city.
    “If you just look at Medicaid – it’s grown in five years from $20 million to $33.4 million,” he said.
    He also rattled off a list of ways in which the county helps the city and said the county might need to cut back on such items if it can’t get additional sales tax revenue. But he insisted that no “threats” were made.
    “It depends on our ability to pay, so those things are all in the mix, but there’s been no threats,” Gardner said. “We have a good relationship with the city. Working together does work.”
    All of the city and county Democrats in the 2007 elections ran under that slogan. But this year, Blanchfield and others on the council have begun repeating it with biting sarcasm to describe their relationship with the county.
    “Working together works? Yeah, it works for some people,” Blanchfield said Wednesday.
    The county has not yet told the towns what the proposed agreement would be, since they have no vote on the contract. Glenville town Supervisor Frank Quinn said that lack of communication was representative of the entire negotiation.
    “The bloody damn towns have no say in what this sales tax distribution will be,” he said. “Sometimes the county puts a bag over our heads and tells us what’s going on.”
    The towns do not get an official say on the contract because the county and city decide whether to share the sales tax with them.
    Under the current agreement, the city gets $11 million and the towns share $7.772 million. In addition, Metroplex Development Authority gets 70 percent of one half-percent of the sales tax, with the other 30 percent going to the towns.
    After those payments, the county collects sales tax for itself, up to a threshold of $83.5 million. At that point, the excess is distributed among the city, county and towns. However, 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. The county was expected to 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.
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Glenville town Supervisor Frank Quinn said that lack of communication was representative of the entire negotiation.
    “The bloody damn towns have no say in what this sales tax distribution will be,” he said. “Sometimes the county puts a bag over our heads and tells us what’s going on.”
    The towns do not get an official say on the contract because the county and city decide whether to share the sales tax with them.

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EDITORIALS
Sch’dy should take county’s sales tax deal

    Schenectady County leaders are pressuring their counterparts in the city — Democrats all — to accept a change in the sales tax distribution agreement that would give the city an extra $25,000 per year for the next six years, on top of the $11 million it currently reaps. That seems like a fair enough deal given the state of the economy right now, and the city council seems ready to go along. But not Councilman Mark Blanchfield, who thinks the city can do even better and should hold out for more. Even if he’s right, he’s wrong to press the issue.
    The interests of both the city and county are best served when they’re getting along, but the city probably has more to lose if it alienates county officials. For one thing, the county subsidizes — to the tune of several hundred thousand dollars — the city’s hazardous material operations, police department and Central Park greenhouse. It’s threatening to withhold those subsidies if the city won’t play ball on the sales tax issue; there’s probably more it could do to make life tougher on the city.
    The city could pull out of the sales tax agreement entirely, and levy its own sales tax (as the city of Saratoga Springs did a few years ago — and later regretted it). Schenectady used to do it that way, but never made as much as the $11 million the county gives it every year. There’s little reason for it to expect to do so now — especially with the sinking economy. Sales tax revenues have been rising countywide, but the city’s population has been falling and more ..................................http://www.dailygazette.net/De.....amp;EntityId=Ar04401

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SCHENECTADY
City Council agrees to sales tax deal
County Legislature plans vote

BY KATHLEEN MOORE Gazette Reporter

    The City Council, facing the possible loss of $11 million in annual sales tax revenues, voted reluctantly Monday night to approve a new agreement with the county.
    City officials said the county had threatened to pull out of the sales tax deal altogether if the council did not vote in favor of the new agreement by Monday night.
    That would have forced the city to try to collect taxes within its boundaries while the county collected the tax everywhere else. The change would have left the city without any sales tax revenue for several months. Making matters worse, the county is legally allowed to keep more than half of the city’s sales tax revenue, so the city could end up with far less than the $11 million it had budgeted.
    “The risk of losing sales tax revenue for a portion of the year — we just can’t have that,” council President Margaret King said before voting in favor of the county’s proposed new sales tax deal. It passed by a vote of 4-3.
    The county Legislature is scheduled to vote on the issue in a special meeting set for 7 p.m. on Thursday.
    At the city meeting, King was not the only council member to express hesitation about the new deal. But the county’s threat persuaded several of them to vote in favor of the agreement, in which the county would give the city its normal $11 million as well as an additional $25,000 in sales tax revenue annually for four years. In exchange, the city would give up all rights to sharing the excess if the county generates more sales tax than expected.
    Council members had vehemently opposed the new agreement, since they believe that next year will be the first year in which the shared-revenue clause would go into effect. The county’s sales tax receipts have been slowly increasing and were on track to ex- ceed the maximum of $83.5 million this year.
    Councilman Mark Blanchfield appealed to his colleagues at length Monday in an attempt to persuade them not to give up the city’s 31 percent share in excess sales tax for only $25,000 a year.
    “Just a 1 percent growth on that [sales tax revenue] is $830,000. Two percent growth, you’re talking $1.6 million. Thirty-one percent of $1.6 million is nearly $500,000,” he said after voting against the contract. “The odds are with us.”
    C o u n c i l w o m a n B a r b a r a Blanchard agreed. “I don’t like the fact that this contract does away with that [shared-revenue clause]. Once we lose that, it’s very diffi cult to get back,” she said, voting no.
    Councilman Joseph Allen added that he would not “rubber stamp” what he sees as a bad deal for the city.
    “If there’s a risk, I guess I’ll take it,” he said before voting against the contract.
    But one council member said the guarantee of $11.025 million next year — and another $25,000 each year — was .......................................http://www.dailygazette.net/De.....amp;EntityId=Ar00901

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The county’s sales tax receipts have been slowly increasing and were on track to ex- ceed the maximum of $83.5 million this year.

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The county’s sales tax receipts have been slowly increasing and were on track to ex- ceed the maximum of $83.5 million this year.

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Special Legislative Meeting Announced



  

NOTICE OF SPECIAL MEETING

December 4, 2007 at 7:00 PM

TAKE NOTICE that pursuant to Subdivision three of section 2.03 of Article II of the Administrative Code of the County of Schenectady, there is hereby called a Special Meeting of the County Legislature by the Clerk thereof, at the direction of Chair Susan E. Savage, to wit:
THERE SHALL BE a Special Meeting of the Schenectady County Legislature on Thursday, December 4 at 7:00 p.m. by the call of Chair Susan E. Savage to be held in the Chambers of the Schenectady County Legislature located at 620 State Street, Schenectady, New York, 6th Floor, for the purpose of considering a resolution approving sales tax distributions in the County of Schenectady and authorizing the County Manager to execute an agreement with the City of Schenectady providing for said sales tax distributions.