MAYVILLE - A proposal to increase the county's sales tax rate will be put to vote Wednesday.
The resolution has been put forth twice before in recent months by its sponsor, County Executive Greg Edwards, but was both times pulled before reaching legislators.
In December, Edwards cited flux in Albany as his reason for pulling the proposal - assuring that it would eventually return, as he says the revenue is needed to shore up the county's coming budget deficit.
He reiterated the point in his State of the County address in February.
In a series of slides, Edwards showed how the county's costs have continued to rise in recent years while revenues have fallen. In 2012, Albany is requiring more to be paid by the county - an increase of $16.6 million, according to Edwards. To shore that up solely in cuts would mean eliminating all of the services which the county has control over. To put it on the property taxpayers alone would be a 28 percent increase to property taxes.
"As a result of these undeniable facts, it's clear to me that we will have to take action," Edwards said. "We will have to eliminate much of our non-required services and return our sales tax rate to 8.25 percent which existed in 2006 when our costs were much less. The only other choice is to raise property taxes to make up that share. Unfortunately, we do not have the luxury of thinking that Albany is going to help us in this situation. The governor's budget does not reduce the amount of money demanded of us. In fact and instead it will increase the total local dollars taken from us by Albany by millions of dollars. We do not have the luxury of using our rainy day funds because those have already been taken by Albany in previous years. No, we must create the solutions to these challenges in 2012."
The resolution will be put to vote Wednesday, however it is not only a proposal to increase the county's sales tax rate. It is also a proposal to eliminate the "Hold Harmless" payments which are made by the county to local towns, villages and cities.
SALES TAX
As written, the resolution requests that the county's sales tax rate be taken from its current 7.5 percent to 8.25 percent.
The county's sales tax rate decreased from 7.75 percent to 7.5 percent on Dec. 1. For each quarter of a percent on the sales tax, the county sees $3.25 million in revenue.
As explained by county officials such as Edwards and Majority Leader Larry Barmore, R-Gerry, passage of the proposal does not mean an automatic increase to the county's sales tax rate.
"It is only the first in a three-step process," Edwards said of this first legislature vote.
According to Barmore, if approved by the County Legislature, the request will then go to Albany for approval and would then return to the county for final approval by legislators.
"Once we get their approval," Barmore said of Albany, "we have to agree to accept it. And right at this point in time, I don't want to close any doors. The governor has promised us all kinds of mandate relief and I want to trust him at his word, but he's been there nearly four months now and I haven't seen any mandate relief.
"None of us want taxes to go up," Barmore continued. "But by voting in favor of this, it's not increasing the sales tax. All that we're doing is sending it on to the state to get their approval. ... So I'm not in a position right now where I want to close any doors that we might need to use later on. Hopefully we won't need to use them, but I'm not closing them at this time. They'll say 'yes' or 'no' and hopefully they'll say 'yes,' but that's when we'll decide whether we'll actually do it or not. It's still going to come back to the floor of the legislature."
OPPOSITION
The sales tax resolution failed to pass the Administrative Services Committee on Monday.
Despite stalling in a 2 to 2 vote, with committee member Bob Scudder, R-Fredonia, absent, the proposal will be put to vote at the full legislature meeting Wednesday. Any legislator has the power to push any resolution forward to the full legislature despite failing in committee.
The proposal was supported in committee by Barmore and John Runkle, R-Stockton. It was opposed by Jamestown Democrats Lori Cornell and Paula DeJoy.
On Tuesday, Jamestown City Councilman Vince DeJoy called The Post-Journal to voice his opposition to not only increasing the county's sales tax rate, but also to the elimination of the "Hold Harmless" agreement.
HOLD HARMLESS
The county makes an annual payment to towns, villages and cities for a tax it's not collecting, according to Edwards.
According to Edwards, the county pays around $2.1 million to local municipalities each year. In eliminating the "Hold Harmless," Edwards wants to quit making those payments - keeping the money and essentially passing the problem on down to the towns, villages and cities, according to DeJoy.
Past figures have put the payments to the two cities at totalling $676,817. For the towns and villages, the payments total $1,423,183. The payments, however, change yearly, as population and assessed valuation of property each change. For the city of Dunkirk, such a change would mean losing $196,991 in revenue annually while the city of Jamestown would see a decrease of roughly $479,825.
"It's just unconscionable," DeJoy said of the proposal.
Asking state officials to increase the sales tax rate by 1.25 percent is significant in-and-of-itself, he continued, but eliminating the "Hold Harmless" is shifting the burden from the counties to the local municipalities.
"The county executive ... has said so many times in public statement that he resents the state trying to shift the burden down to the counties," DeJoy said. "Well, he's trying to do the same thing here. And then we have to figure out how to make up for that huge loss of revenue that isn't theirs to begin with.
"And I totally agree with the county executive when it comes to the shifting of burden from the state down to the county," DeJoy concluded. "I agree with him. I'm with him 100 percent. I just don't want to see him try to attempt to do the same thing to us, the next level down. I'll fight with him as far as it has to go to stop that practice from the state, but if I'm going to be behind him on that, I want him to not do the same thing to us."
DeJoy is the City Council's finance chair and fears what the elimination of the "Hold Harmless" will mean for the city in 2012 and future years.
The County Legislature will meet at 6:30 p.m. Wednesday in the legislative chambers on the third floor of the Gerace Office Building in Mayville.