Allegany County lawmakers are starting their triennial push to keep an additional 1.5 percent above the basic, state-authorized sales tax rate, which is generating more than $9 million a year from taxpayers, an amount which is continuing to climb by double-digit percentages annually.
The county legislature’s Ways and Means Committee will be requesting the full board to enact a resolution to be forwarded to state lawmakers seeking to extend current authority, which expires at the end of November, to collect four and a half percent in local sales taxes, the third highest rate in New York State.
Under state law, counties are provided with the ability to collect three percent in local sales tax, on top of the state’s four percent, and must seek special state legislation for more than that, which has been provided for several years to Allegany County in three-year authorization blocks.
Some other counties have been collecting an additional four percent, for a total of eight, under special state authorization, with Allegany at four-and-a-half percent. Only Erie and Oneida counties exceed this amount, being at a combined total of 8.75 percent.
Based on more than $27.7 million in sales tax revenue received in 2022, nearly 18 percent more than the $23.5 million it budgeted last year and over 8.6 percent more than the $25.5 million budgeted for this year, the county will generate $9.24 million from an additional 1.5 percent state authorization.
However, this number, generally attributed to inflation, is continuing to increase, with County Treasurer Terri Ross telling Budget Committee members earlier in the day Wednesday that 2023 sales tax revenues for this year already are running $586,000 more through mid-February than last year, or a more than 21 percent increase.
She also noted that this doesn’t include sales tax revenues anticipated from the Runnings store in the former Kmart building in Wellsville, which is projecting to have a soft opening in March and a grand opening in May, which should add even more to the county’s sales tax intake.
The county also takes in more than $130,000 in motel and lodging taxes each year, compared with $150,000 received in 2019, prior to the start of the pandemic. The county has budgeted $170,000 in that category for 2023.
As reported previously, the county has been sitting on a surplus of over $30 million, more than the county’s $29.7 million levy in property taxes projected to be received this year.
Independent auditors reported that the county received nearly $6.6 million in revenues over expenses in 2021, requiring no use of the $5.324 million which county legislators applied to the budget as it provided a .0254 cents per thousand property tax reduction.
Last year, the board used $5.33 million in surplus to provide an average tax decrease of 28 cents per thousand in the average tax rate. The county has until April 30 to provide a year-end report to the State Comptroller as to its December 31 finances, which will include the $4.2 million in unbudgeted sales tax revenue.
For the current year, county legislators appropriated $2.33 million less in surplus toward the 2023 budget, while reducing the average tax rate by 44 cents per thousand.
Due to varying equalization rates, however, a significant percentage of property taxpayers in the county ended up with a county property tax increase.
County Legislator Dwight (MIke) Healy of Belmont voiced support last week for renewing the process to obtain the added sales tax, saying the only two primary sources for local county funding are the sales tax and the property tax.
He said “a lot of people from outside the area contribute to (the sales tax) and, hopefully, there will be more.”
The sales tax “doesn’t discourage any new businesses or industries, in particular, from coming into the county,” Healy added, “but if we had to increase property taxes, that certainly would.”
Ways and Means Committee Chair Philip Stockin of Houghton said he understands there is “talk at the state level” to allow counties to continue taxing sales at current levels, without the State Legislature having to approve new legislation each year for those authorizations which are expiring.
As previously reported, local governments are allowed to carry an undefined “reasonable” surplus which, in the case of school districts, is determined by law to be only four percent.
During 2022 budget preparations, Treasurer Ross reported that the county had an estimated $11 million available that wasn’t needed to cover cash flow needs., an amount in access of the $9 million being generated by the 1.5 percent additional sales tax levy. The $11 million is equal to a property tax reduction of approximately one-third.