Orleans, NY counties fear big tax increase over ‘unconscionable’ inaction at state with sales tax extension
ALBION – Orleans County stands to lose nearly $4 million in tax revenue if the State Legislature fails to extends the 4 percent county share with sales tax in Orleans.
The matter, normally a routine extension every two years, is held up in the State Assembly, which is trying using the extenders in 53 counties as a bargaining chip for the State Senate to allow mayoral control of New York City schools.
“It’s a very real problem,” said Chuck Nesbitt, the county’s chief administrative officer. “It’s unconscionable.”
The county receives 4 cents for every taxable dollar. (New York also gets 4 cents for every taxable dollar.) Orleans used to be 3 cents. To get the extra penny, the county needs Albany approval every two years.
That extra penny in sales tax accounts for about $3.85 million in revenue. County officials are worried because the state legislative session is winding down this week, and still no action with sales tax.
If the State Legislature fails to approve the 4-cent rate, Orleans property tax owners would face a $2.25 increase in the tax rate in 2018, or an additional $225 for a house assessed at $100,000, Nesbitt said.
The New York State Association of Counties said inaction at the state would leave a $1.8 billion budget hole for the 53 counties that need the sales tax extender.
“County budgets, which will be developed over the course of the next two to three months, have to account for the loss of these revenues,” said NYSAC Executive Director Stephen J. Acquario. “We use property taxes and sales taxes to fund state mandates and local programs. If lawmakers leave the Capitol this week without extending sales tax authority, then there will be a $1.8 billion hole, which would have to be filled with property taxes. Additionally, over of the $1.8 billion in revenue, $400 million is shared with hundreds of other local governments.”
The extra penny in sales tax is needed to fund state-mandated programs, such as Medicaid, and to help ease pressure on property taxes, NYSAC officials said.
“In one fell swoop State Leaders could undo everything that has been done in the past ten years to curtail property tax increases,” said NYSAC President William E. Cherry, the Schoharie County treasurer. “We need lawmakers to act before the end of this week. If they do not, then program cuts, staff layoffs, and property tax increases are a direct result of their inaction.”