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Continued Erosion of Sales Tax Receipts Leave County Coffers Lacking
County leaders call for a more transparent process for flow of sales tax receipts
January 13, 2010
The latest sales tax numbers out of Albany today indicate that 52 of the State’s 57 counties are seeing continued decline in sales tax receipts—13 of them are seeing double digit decreases over the same period the last year.
The most recent data from the New York State Department of Taxation and Finance includes the fourth quarter 2009 and year end (total year) sales tax collections by county.
“We knew the numbers would not be good, but no one predicted they would be this dismal. It begs for a more timely and transparent flow of information between the state and our counties. Then we would have been more prepared for this data,” said NYSAC President Tom Santulli, Chemung County Executive. Chemung County’s fourth quarter 2009 sales tax receipts were 7.2 percent lower than the same quarter in 2008—down 6.4 percent from 2008 to 2009.
New York counties rely heavily on two forms of revenue: sales taxes and property taxes. Deep and prolonged declines in sales tax revenue put pressure on counties to raise property taxes, cut services or layoff workers in order to keep our budgets balanced. These latest figures represent five straight quarters of decline in sales tax revenue.
The New York State Department of Taxation and Finance initially collects data from retailers and sends local government their sales tax revenue on a period basis. While county budget officials have expertise in managing the lag time between sales tax collections and the revenue flowing to county coffers, this recession has revealed the need for reforms that bring greater transparency to the process.
“County officials are finding out too late what their sales tax numbers look like. We need greater transparency in order to better understand what is happening economically in some of our communities and how it will impact our budgets. The days of back of the envelop sales tax projections have got to come to an end,” said NYSAC Executive Director Stephen J. Acquario. “We have the technology we need to open this process up, and we should.”
NYSAC is proposing a dashboard-like information sharing system, the Joint Revenue Resource Center, that will provide a platform for enhanced revenue forecasts, especially of the sales tax, and serve as a forum for state and local fiscal managers to work together to improve the management and effectiveness of collective state-local revenue systems.
“We are not necessarily suggesting the state is holding on to our sales tax revenue; we just need greater transparency so that we can more effectively anticipate our revenue and manage our budgets,” said Santulli.
County leaders also renewed their call for the state to collect sales taxes on cigarettes sold by Native American retailers to non Native Americans. “We are losing hundreds of millions of dollars each year by not collecting these cigarette sales taxes. We have a law on the books and its time for the State to put the pieces into place to begin implementing it,” said Madison County Administrator Paul Miller, the chair of NYSAC’s Standing Committee on Native American Affairs.
The New York State Association of Counties is a bipartisan municipal association serving all 62 counties of New York State including the City of New York. Organized in 1925, NYSAC’s mission is to represent, educate and advocate for member counties and the thousands of elected and appointed county officials who serve the public.
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