Wellsville and Andover officials are pushing a proposal for Allegany County, NY, to share its rapidly increasing sales tax revenue, which has the potential for exceeding its total property tax levy this year, with local governments.
District IV county legislators, representing the two towns comprising nearly one-fifth of the county’s population, indicated agreement this week for some type of revenue sharing during a quarterly public meeting in Andover.
County Legislator James Rumfelt of Andover told the gathering there may be five county lawmakers, or one-third of the 15 total, currently favoring some type of distribution to towns.
If that number materializes, it would require three additional to reach the eight required for passage. Rumfelt didn’t identify those who he feels would vote for some type of sharing.
Local government expenses increasing
Wellsville Town Supervisor Shad Alsworth and Village of Wellsville Mayor Randy Shayler heavily promoted the sharing concept at the meeting, with Andover Town Supervisor Gus Weber noting that local governments are being hit hard with rising costs, aggravated even more by rising inflation.
At the same times local governments must stay within a two percent property tax increase cap, unless it is overriden following a public hearing and a 60 percent vote of a local governing body.
Legislator Steve Havey of Wellsville, who also is majority leader of the all-Republican county board, said the information he has gathered shows all but 11, or less than one out of five, of the 57 counties outside New York City, share their sales tax on some basis with local governments.
Allegany County local governments at disadvantage
According to a 2020 report by the State Comptroller, available at https://bit.ly/3OWnGDF, Allegany County local governments are at a disadvantage in that lack of a city within county boundaries keeps them from exercising and leveraging a state law provision which allows a city to preempt one-half on a count’s base three percent local sales tax.
In all counties in which a preemption has occurred, there has been a sharing of the same amount to local governments outside the city, according to the report.
Even without this provision, the Comptroller notes, nearly half, or 10 out of 21 counties without cities, still share sales tax revenues with their local governments, based on various formulas.
A chart showing shared breakdowns by county, along with a map showing shared proportions, accompanies this story, with the Comptroller’s report listing all sharing counties and the amounts distributed.
County sitting on $30 million in surplus
At the present time, as Allegany Hope Community News has been reporting, Allegany County is holding some $30 million in surplus funds, more than its annual property tax levy, in unappropriated fund balance, drawing interest on the deposits.
The county Board of Legislators Wednesday approved without discussion a $131.8 million budget which applies $3 million of the surplus, or 10 percent, as a revenue, resulting in a 45-cents per $1,000 tax decrease, although property owners in 13 of 29 county towns will pay in excess of the $13.89 per $1,000 tax rate due to variations in assessment equalization rates.
Last year, the county received nearly $6.6 million more in revenues over expenses than that which had been budgeted, with nearly $4.9 million of that amount coming from excess sales tax revenue over that originally budgeted.
As of mid-November of this year, the county had received some $24.8 million in sales tax revenue, or $1.3 million more than budgeted, with at least another $4.1 million anticipated before the end of the year based on last year’s revenues, without considering inflation.
The excess would have been even higher at this point, except that the county granted a three-month sales tax cap holiday from June through August on fuel sales, with no tax being paid by consumers on amounts over $3 per gallon.
The county board made no move to continue the holiday after August 31, with state relief of approximately 16-cents per gallon continuing through the end of the year.
Basic sharing formula could provide some $10 million
Under a sharing formula comparable to that occurring in counties in which cities are preempting half the base amount, some $19.3 million would be generated in Allegany County as a result of a three percent base sales tax, derived from estimated revenue projected at the end of the year.
This would provide some $9.66 million to Allegany County local governments.
Last fall, County Treasurer Terri Ross told legislators that some $11 million was available in the county;’s fund balance beyond that which was needed for cash flow.
At this year’s public hearing on the county’s 2023 budget, Allegany Hope advocated that some $10 million be allocated for permanent relief to taxpayers, either by reducing the county’s property tax levy by a third, the sales tax rate by one-half percent or more or a combination of both.
The county currently has the second highest real property and the third highest general sales tax rates in the state, having been tops in property tax and the second highest in general sales tax within the past few years.
More county resident advocacy needed
Advocates at the Andover meeting for a sharing of sales tax revenues said there needs to be more education of town officials and their constituents in other parts of the county for this action to occur.
They noted that all local governments would benefit, but town officials and local residents need to raise this subject at district legislative meetings and to their county legislators directly.
Legislator Gary Barnes of Wellsville indicated his mind has been changed toward the affirmative for sales tax sharing after hearing the arguments presented for the proposal at previous district meetings.
Rumfelt noted that some county legislators claim that the county already provides aid to local governments by paying the full share of community college student levies by the state, highways assistance and other benefits.
Havey said he is unwilling to take away anything which the county already is providing, with discussion as to what the county is required to provide under state law and the unequal benefits to various towns depending on the topic.
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