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St. Lawrence County sales tax: Less for towns, more for taxpayers?

Posted 4/14/13

By JIMMY LAWTON The proposal to increase St. Lawrence County’s sales tax would generate an estimated $14 million with $900,000 going to Ogdensburg and just $1.4 million divided between the towns …

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St. Lawrence County sales tax: Less for towns, more for taxpayers?

Posted

By JIMMY LAWTON

The proposal to increase St. Lawrence County’s sales tax would generate an estimated $14 million with $900,000 going to Ogdensburg and just $1.4 million divided between the towns and villages, based on recent sales tax receipts.

The remainder would be used to reduce the county tax levy by $7.6 million the first year and stabilize future increases.

County legislator Joseph Lightfoot, who has followed the issue closely, says each town will receive a smaller percentage of the additional 1 percent than they do from the current sales tax. However, he said taxpayers will benefit more if the majority of revenues go to the county.

He said it will allow the county to reduce the St. Lawrence County tax levy by 14 percent the first year, offsetting an unprecedented increase in the levy in the 2013 budget.

He said the plan also sends money back to local municipalities, which could be used to decrease tax levies in towns and villages.

Dividing the Loot

Under the current formula used to distribute St. Lawrence County’s 3 percent take of the sales tax, the county receives 50 percent of the revenues. The City of Ogdensburg collects 6.4 percent and the remaining 43.6 percent is divided among the counties town and village governments.

This formula would remain in place for the existing 3 percent sales tax.

If the increase passes, the county plans to take a larger share from the additional 1 percent. Under the new formula proposed, the county would receive 83.6 percent of revenue generated by the 1 percent sales tax increase. Ogdensburg would still receive 6.4 percent and the remaining 10 percent would be divided among the town and villages.

If the current formula of 43.6 percent going to local municipalities were applied to the increased sales tax, towns and villages would have received $6,111,284, based on figures from 2012.

However, the 10 percent split proposal put forward by the county would have generated only $1.3 million for municipalities in 2012, while Ogdensburg would have received $852,798.

Although the distribution strongly favors Ogdensburg, Lightfoot said it can’t be helped.

“That is due to a written agreement that the county has with the city. The agreement will run until 2020 at which time it will have to be re-negotiated,” he said.

With sales tax revenues expected to rise in 2013, the amount each municipality will receive should increase. For example, Ogdensburg is expected to get $902,343. Updated breakdowns for individual towns and villages would were not available.

True Savings?

While the vast majority of towns and villages voted in favor of the increase at a recent meeting, the formula change raised concerns from some town and village officials, who thought a larger share of the new tax should come back to the municipalities.

Although the decrease in funding to individual communities is significant, Legislator Lightfoot, who has been active on the finance committee, said the savings to the individual taxpayer is actually higher under the new formula.

Because county taxes are higher than local taxes and are paid by all residents, he said the savings is also greater.

Lightfoot said county taxpayers would see a $7.6 million decrease in the tax levy the first year, based on estimated revenues.

He said if the towns and villages use their take to reduce taxes, taxpayers across the county would save more than $8.3 million.

Lightfoot said while no one is thrilled with the proposed increase, failure to pass the one percent will be devastating to property owners in St. Lawrence County.