Counties are wise to look for ways to boost revenues without jeopardizing services during this unprecedented time
Typically I do not respond to previous letters to the editor or engage in public debate utilizing this section of The Hub. However, I find it necessary to address a recent letter in which the author took issue with the New York State Association of Counties (NYSAC) urging the state to raise sales tax one cent and to legalize recreational marijuana.
The author also made some suggestions regarding county employment levels and services that I will address in this letter.
It is reasonable to presume no consumer wants to pay more at the register for goods or services. However the county is in an unprecedented time, facing the most precarious budget situation in many years, and some would argue, ever.
As a result, county leadership is doing its best to manage this situation with limited resources and very little answers from the state. Orleans County has lost a tremendous amount of revenue from a decrease in sales tax revenue (its second largest revenue source) over the past several months.
This loss has to be accounted for some how to balance the budget. Of the eight cents per dollar of sales tax, Orleans County receives four cents. Each penny results in approximately $4.25 million annually. This means if the state increased the sales tax by one penny and the county received 100 percent of that increase, it would result in an additional $4.25 million. Even if the state split it 50/50, that would be approximately $2.13 million sent to the county. This would be a significant amount to offset the losses already incurred.
The author suggested eliminating “non-mandated” programs. The issue is, the largest burdens for the county have been and continue to be New York State mandates that the state refuses to fund. In other words, the state requires these programs but does not pay for them.
Nine state mandated programs account for nearly 90 percent of county taxes across the state. In 2019, the Orleans County budget included approximately $16,284,996 to cover those nine programs. This figure accounted for approximately 93% of Orleans County property taxes. This point is to illustrate the issue is not “non-mandated” programs within the county.
As it stands right now, the county is set to see at least a 20 percent reduction in the few state reimbursements they do receive. To make up that difference, plus the decrease in sales tax revenue over the past several months, the county would have to raise property taxes approximately 13 percent to maintain the level of services provided. That increase in property taxes would have a far more detrimental impact on taxpayers in the county than the proposed sales tax increase would.
It is simple to suggest cutting positions and transitioning to a part time county labor force, but the reality is the economic implications would be far greater. The economy functions on consumers willing and able to buy goods and services. Some cuts in county employment might be inevitable, but broad cuts would result in a large number of people out of work, unable to contribute to the economy, no matter how much they might want to. At a time when the economy is so fragile, it cannot afford more people in a vulnerable economic position. This is basic economics.
I won’t argue the social or moral implications of the legalization of marijuana, because I understand and agree with these arguments and potential ramifications. What I will say is many states have seen a positive economic boost from choosing to legalize it. Again, during this fragile economy, the economic impact is what leaders need to look at and take into consideration.
It is understandable for people to disagree and take issue with the two suggestions made by NYSAC and county leaders without looking at the numbers and fully diving into the economic implications. It is undeniable that the state has been fiscally mismanaged for years. However, the bottom line is these two proposals could very seriously mitigate the economic and budgetary implications of Covid. In my opinion, local leaders have done a great job managing this unprecedented time. Both fiscally and socially.
I urge residents to avoid a knee-jerk reaction to a one cent increase in sales tax per dollar spent and instead understand the alternative options to address the revenue shortfall and the far worse economic implications of them.
James C. White
Village of Medina