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Sales Tax Revenues up in Some Counties

If the first quarter sales tax receipts are any indication, forty-one (41) upstate counties are still mired in the 18 month recession that continues to slow retail sales in most New York communities. After six consecutive quarters of decline in sales tax collections, most county budgets continue to be squeezed for revenue.Despite these results, over a dozen (16) counties saw an uptick in their sales tax receipts—the first signs of growth in over a year. “After 15 months of straight declines, at least some of our counties are seeing some rebound in sales tax receipts,” said NYSAC President Tom Santulli, the county executive of Chemung County, which was one of the 16 counties who saw an increase in sales tax receipts in the first quarter. “Recognizing that we still have a long way to go, we now have some green shoots showing signs of recovery. Whether they are sustainable, and whether they will spread to the rest of our upstate counties, is what we’ll be watching this spring and summer.”Counties traditionally rely on two forms of revenue: sales taxes and property taxes. In the last decade, because of unsustainable property tax increases, counties have increasingly relied on sales taxes to balance their budgets.According to the State Comptroller, from 1998 to 2008 county property tax revenue rose 42 percent, while sales tax revenues rose 66 percent, making sales tax the largest single revenue for counties, accounting for over 25 percent of total revenues for all counties. In 2008, sales tax revenue exceeded property tax revenue in 37 counties. Counties use sales tax revenues to pay for State programs delivered by counties—including Medicaid, public assistance, corrections and other underfunded state mandates.“Counties are re-organizing and streamlining their governmental operations. Yet even with these innovative approaches and fiscal discipline, many still face unprecedented budget gaps as the year progresses,” said NYSAC Executive Director Stephen J. Acquario. “What we need from Albany now is more fiscal responsibility at the State level and fewer mandates imposed on local governments. Additionally, we must also have a broader economic rebound or county officials will be forced to cut services or raise taxes.”

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