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St. Lawrence County government facing growing obstacles to stable finances with disappointing sales tax report

Posted 2/12/16

By CRAIG FREILICH St. Lawrence County government, struggling to keep its finances in balance, is facing a disappointing 2015 sales tax report that was worse than the Board of Legislators had …

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St. Lawrence County government facing growing obstacles to stable finances with disappointing sales tax report

Posted

By CRAIG FREILICH

St. Lawrence County government, struggling to keep its finances in balance, is facing a disappointing 2015 sales tax report that was worse than the Board of Legislators had anticipated.

The amount actually collected -- $54.9 million -- was 5.28 percent lower than the $58 million the board had anticipated, even after they had lowered their expectations in the face of declining receipts in 2014.

The amount budgeted for 2016 is lower still, anticipating a continuing downward trend.

“Due to the underperformance in sales tax revenues, the budgeted 2016 revenue for sales tax reflects a decrease of $2.9 million, or 5 percent,” said county Deputy Treasurer Renee Cole.

“Adverse economic conditions such as the weakening Canadian dollar and the decline in gasoline prices have contributed to the decline in sales tax revenues,” Cole said. The belief is that lower gasoline prices have cut into taxes realized from gasoline sales, which are based on a percentage of the total price.

And the belief that fewer Canadians are coming across the border to shop in St. Lawrence County and therefore spending less money here is backed up by recent figures from the Department of Homeland Security.

DHS reports that border traffic entering New York State from Canada in 2015 was down from 2014, with 8.8 percent fewer personal vehicles and 9 percent fewer passengers in vehicles making the trip in 2015.

In 2015, DHS counted 8.1 million personal vehicles and 16.9 million passengers crossing into New York State, compared with 8.8 million personal vehicles and 18.6 passengers in 2014.

“It should be mentioned that the county shares these revenues with local municipalities, so the burden of this shortfall is carried by them as well,” Cole said.

Contrary to expectations, the amount of sales tax for the county has actually dropped, proportionately, since the county got approval for an extra one percent in the sales tax rate that started on Dec. 1, 2013.

In return for a plan adopted by legislators to get the county’s finances on a firm footing by restoring its diminishing fund balance, the state Legislature agreed in 2013 to allow the county to raise the sales tax in the county by 1 percent, to 8 percent. That is 4 percent for the county treasury on purchases in the county, up from 3 percent, plus 4 percent to the state.

At the end of 2014, the first full year with the higher sales tax, revenues to the county had gone up, totaling $56.5 million, compared to $43.5 million under the lower rate for 2013, about 30 percent higher.

But then-county treasurer Kevin Felt said the difference was all in the extra 1 percent in the rate, and was not due to a better economic climate in the county.

Proportionately, he said, the tax collections were down.

“If you were to calculate the sales tax at the 3 percent rate, we would have been down to about $42.3 percent,” he said in February 2015.

Since then, sales tax receipts have continued to disappoint, and not just in St. Lawrence County. Most North Country counties have seen declines in sales tax revenues in the last year.

Two of the county’s next door neighbors, Jefferson and Franklin counties, saw declines of more than 3 percent for 2015, more than St. Lawrence. To our immediate south, Hamilton County, large in size but small in population, saw an increase of more than 3 percent last year.

According to figures supplied by Deputy Treasurer Cole, the quarterly sales tax revenue figures for the last two years have been:

• 1st quarter, 2014, $13,316,320; 2015, $12,977,140, down $339,180 or 2.55 percent

• 2nd quarter, 2014, $14,349,050; 2015, $14,033,014, down $316,036 or 2.20 percent

• 3rd quarter, 2014, $14,721,037; 2015, $14,099,321, down $621,716 or 4.22 percent

• 4th quarter, 2014, $14,090,572; 2015, $13,830,808, down $259,764 or 1.84 percent

• Totals, 2014, $56,476,979; 2015, $54,940,283, down $1,536,696 or 2.72 percent.

At this point no one is making a certain prediction about what the sales tax revenue picture will be at the end of the year, but the county board has built a 5 percent drop into its budget plan for the year.