The Steuben Courier Advocate
  • County seeks to unknot sales tax revenues tangle

  • Steuben County officials will have to untangle another twist in a state formula when they meet this week for three budget workshops.

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  • Steuben County officials will have to untangle another twist in a state formula when they meet this week for three budget workshops.
    County Deputy Administrator Jack Wheeler said Steuben officials recently learned counties will be required to report sales tax receipts now sent to municipalities as county revenues.
    The impact on Steuben taxpayers could be significant, because of its impact on the 2-percent property tax cap mandated by the state, Wheeler said.
    In 2011, the county collected more than $50 million in sales tax receipts, and with $21 million going to the cities and towns as their share. The county kept $29 million, using it to offset the property tax levy.
    But this year, Steuben is required to count a portion of the municipalities’ sales tax collection as county revenues.
    County Treasurer Pat Donnelly said that portion the county must count as revenues will amount to around $7 million this year. That phantom $7 million will have to be offset by other cuts to county spending.
    Wheeler said Steuben officials only learned about the formula three weeks ago at a state budget workshop. It apparently was in place in 2011 but not included until this year, Wheeler said.
    “We just looked at each other and said, ‘Did you know about this? I didn’t know about this,’” Wheeler said. “It’s not good for us. It’s not good for our taxpayers.”
    The state did impose a similar formula on Steuben‘s self-funded workers’ compensation program last year. The county distributes workers comp funds to the towns but was forced by the state to consider the town funds as Steuben revenues.
    State officials imposed the 2-percent property tax cap in the summer of 2011, forcing counties to keep property tax below the cap. Counties objected strenuously at the time, with Steuben pointing out 95 percent of the tax bill last year paid for state programs like Medicaid.
    The cap means county legislatures must likely cut local programs, like road construction, or approve exceeding the 2-percent limit, officials say.
    And whether Steuben can trim $20 in million costs – when it never got the revenues -- without exceeding the cap is anybody’s guess at this point, Wheeler said.
    We’ve got our work cut out for us,” county Legislature Chairman Joe Hauryski said. “It’s going to make our challenge more challenging.”
    Chemung County Budget Director Steve Hoover said he was unaware of the change in the sales tax formula, but said he doesn’t expect it to have an effect on the property tax cap.
    “We intend to keep it below 2 percent, anyway,” Hoover said.
    Steuben’s current budget is $186 million with a tax levy of $46.7 million. The budget reflects an increase in spending this year of 1.7 percent and an average drop in the tax rate of 10 cents per $1,000.
    Page 2 of 2 - The county’s 2013 budget workshops are slated to begin at 9 a.m. next Monday.

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