Oswego County worries about sales tax situation

By Debra J. Groom

For many years, Oswego County experienced steady growth in sales tax revenue.

This helped the county keep its tax rate low while still providing all the services residents have come to expect and enjoy.

But since the recession of 2008, things have changed. Sales tax revenue has become stagnant. Yes, the county is seeing more sales tax money each year, but not that much more.

“We have two concerns,” said county Treasurer Fred Beardsley. “We have reached a plateau and once you get to that point, if something goes wrong, then you’re in trouble.”

Beardsley said the second concern is costs keep going up and state mandates (items or services the state tells the county it must provide and pay for) also have not lessened.

“The increased costs are going up much more than the revenues,” he said.

This isn’t an Oswego County phenomenon.

A report issued in April by the New York State Association of Counties shows sales tax revenues in counties across the state have “shown no sign of economic turnaround. In fact, 27 counties saw their sales tax revenues reduced” in the first quarter of 2014 compared to the last quarter of 2013.

“We are concerned because many counties are relying more and more on sales tax revenues to help pay for local quality of life services and also to support state programs,” said Association of Counties President Mark Alger, Steuben County manager.

In Oswego County, the legislature and other officials have turned to using more of the county’s fund balance to help keep the tax rate low in the absence of large increases in sales tax.

And in preparation for putting together the 2015 county budget, officials and legislators are looking at everything to see if there are areas that can be cut or reduced to save money.

One such area is the highly controversial proposal to close four of the five solid waste transfer stations, which officials said would save about $500,000 a year.

Beardsley said Oswego County has seen health care costs increase about 30 percent to 40 percent, assigned counsel costs are up $1.5 million and pensions costs are up about $6 million.

For sales tax, Oswego County collected nearly $42 million in 2013, up just $600,000 from 2012.

But of that $42 million, the county kept only about $10.7 million. The rest is shared with towns, villages and the city of Fulton.

From 2007 to 2008, sales tax revenues went up about $2.1 million. For 2008 to 2009, the increase was about $1.1 million. But from 2009 to 2010, the increase was only $641,000.

There was a big jump from 2010 to 2011 with an increase of about $3 million. But then numbers begin to get stagnant.

In fact, Beardsley’s latest sales tax calculations for 2014 show sales tax is about $1.1 million behind what was collected in 2013.

He believes some of the decrease from 2013 to 2014 can be attributed to the harsh winter weather. When the weather is poor, people simply don’t get out to shop.

Also the poor economic climate can cut into sales tax revenue. People who have lost their jobs or people who are on fixed incomes do not have the discretionary funds to buy whatever they want.

And since Oswego County is seeing slight growth in sales tax, that means towns and villages also can expect to see little growth in the amount of sale tax they receive.

“This is not just a county problem,” said Association of Counties Executive Director Stephen J. Acquario. “About 25 percent of county sales tax receipts are shared with other local governments to help support their operations.”

According to the report from the Associtaion of Counties, the first quarter county sales tax data for 2014 continues a trend that began with the start of the Great Recession.

“There has been a significant reduction in sales tax growth on an annual basis. From 1990 through 2007 sales tax growth averaged about 4 percent each year. From 2008 through 2013, average sales tax growth has been around 1.65 percent,” the report states.

 

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