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Ogdensburg sales tax shortfall on pace to be 9 percent below budget expectations

Posted 9/24/16

By JIMMY LAWTON OGDENSBURG – As Ogdensburg leaders struggle to bring the city’s finances in line, low sales tax takes are continuing to make things difficult. Ogdensburg sales tax collections …

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Ogdensburg sales tax shortfall on pace to be 9 percent below budget expectations

Posted

By JIMMY LAWTON

OGDENSBURG – As Ogdensburg leaders struggle to bring the city’s finances in line, low sales tax takes are continuing to make things difficult.

Ogdensburg sales tax collections continue to trail last year’s takes by about 5 percent, and the city is on pace to fall more than 9 percent below budget estimates, according to a public update released by the city.

Contributing factors for the sales tax decline include lower gas prices and fewer Canadian shoppers as the loonie continues to lag behind the U.S. dollar in value.

In September, the city received $276,155.14 in sales tax revenues, about $39,543 less than the same month in 2015 when the city collected $315,698.

This year, the city has so far collected a total of $1,957,013, down $97,440 from the previous year when the city had collected $2,054,454.53.

The news is not devastating on its own, but Ogdensburg also estimated an increase in sales tax collections over 2015, meaning the gap between the budgeted revenue and actual revenue is even wider.

In 2015, Ogdensburg budgeted $3,597,000, but only collected $3,536,727.

In 2016, the city budgeted $3,704,910 and is on pace to collect just $3,359,890. That would leave a budget gap of $345,020 in sales tax collections -- or 9.3 percent less than the budgeted amount -- if receipts continue at the current pace.

Ogdensburg isn’t alone in the lower sales tax revenues. St. Lawrence County’s take continues to fall below those of previous years. However, the county also estimated a decrease in sales tax revenue in its 2016 budget.

In Ogdensburg, the revenue decrease comes as the city is already struggling with a “dangerously low” fund balance.

In March, former City Comptroller Phil Cosmo said Ogdensburg had less than a $1 million in cash in its general fund, the largest portion of the city’s budget.

Among the major issues facing the city is the lack of taxpayers. In May, City Manager Sarah Purdy estimated that 59 percent of all property in the city is tax exempt.

Meanwhile, the city is also trying to maximize efficiency in spending at its wastewater treatment plan, which is need of expensive improvements.