Local counties take state warning in stride
By RODNEY MINOR, The Leader-HeraldArticle Photos
The state Comptroller's Office is urging counties to budget their sales tax estimates for the coming year cautiously because of the state of the economy.
However, local officials said they have been budgeting their sales tax estimates conservatively already and plan on doing so for 2009. They also agreed the state passing along mandated costs, for programs such as Medicare, is a large problem.
In a news release issued with a report discussing possible sales tax problem, state Comptroller Thomas P. DiNapoli said sales tax revenues are economically sensitive and a recession would hurt how much money is collected.
"The economic rollercoaster ride is far from over, and if counties want to avoid fiscal calamity, they should recognize the impact fluctuations in sales tax revenues can have on their budgets."
In the local area, Fulton and Montgomery counties have a sales tax rate of 4 percent. Hamilton County has a 3 percent sales tax rate. In addition, the state collects sales tax at a rate of 4 percent.
Fulton County Treasurer Bruce Ellsworth said the county has about $12.25 million it expects to collect in sales tax for 2008.
He noted the current state of the economy already has had an effect on the sales tax. While the county has not been hit as hard as areas that rely more on retail, he said, it is seeing very little, if any, growth.
Through the first half of the year, Ellsworth said, the sales tax revenue collected by the county was less than expected. He expects the third quarter will be the same.
"There is not much we can do to make up for lost sales tax revenue," he said.
Michael Rooney, the chairman of the Fulton County Board of Supervisors, said collecting less in sales tax puts pressure on the county to raise money through property taxes. However, no one is interested in raising property taxes to compensate for any loss in sales tax revenue, Gloversville's 5th Ward supervisor said.
"The property tax is regressive," Rooney said. "The sales tax is by formula compassionate because there is not a tax on food or medicine."
Inflation and energy costs are sources of concern for Rooney, specifically their effect on both the economy and the county's sales tax revenue. He expects the county to be conservative with its sales tax numbers when it starts working with the budget numbers for 2009.
However, he said, the state can complicate matters by reducing expected aid for programs and mandating changes in programs that it will not pay for.
Jon Stead, the administrative officer/clerk of the board of supervisors in Fulton County, said state mandates far outpace sales tax revenue in terms of their total effect on the budget.
Of the county's $96.8 million 2008 budget, nearly 60 percent is composed of mandates required by the state.
Stead said he has never seen the loss of sales tax revenue present a major problem in his approximately 15 years with the county Board of Supervisors.
"New mandates and the growth in Medicaid has been a real crisis," he said.
Fulton County pays about 25 percent of total Medicaid costs for its residents, Stead said, which works out to about $14 million.
Amsterdam 1st Ward Supervisor Vito Greco, the chairman of the Montgomery County Board of Supervisors, said he is confident enough supervisors will act as "budget watchdogs" to make certain the county's spending is held in check.
Montgomery County has about $14.5 million it expects to collect in sales tax revenue for 2008, county Treasurer Shawn Bowerman said. While the sales tax revenue collected from the first half of this year was better than expected, Bowerman said, he plans on recommending some conservative numbers as he usually does during the budget process.
Greco echoed that statement, saying any type of revenue the county collects is a concern with the economy. The county will need to keep an eye on its sales tax revenue that is typically generated along the New York State Thruway and in retail areas, he said.
The county has a $15.9 million fund balance, which represents about 20 percent of its $81 million total budget for this year.
Greco said while there should be adequate money there to stabilize any loss of sales tax revenue, he noted the fund balance could be used in a number of other areas as well.
William G. Farber, supervisor for the town of Morehouse and chairman of the Hamilton County Board of Supervisors, said the economy and its effect on tourism and local residents' money is a concern.
The county expects to collect about $2.6 million in sales tax revenue this year, and given its location in the Adirondacks, tourism is a contributor to that.
Farber said the concern is people will have to spend money to pay for their energy costs and other needed items, leaving them with less discretionary income to spend.
All of the counties will begin tackling their budget issues this fall.
Rodney Minor covers Gloversville. He can be reached at gloversville@leaderherald.com.
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Ernie9
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07-21-08 6:54 PM
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LOL
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DaveGibson
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07-21-08 5:21 PM
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When did Roger Rooney become chairman of the board of supervisors? You'd think he'd be pretty busy as an assistant principal in Gloversville. Mike Rooney has time. Maybe he should be chairman.
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buttercup11
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07-21-08 12:48 PM
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what about the tax from the smokers,what do they spend that money on? spend it on medicare
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