COLUMN: Sharing sales tax will only address part of the problem

Every little bit helps.

Creating a “Sales Tax Sharing Committee” in Seneca County to explore the feasibility, interest, and methods of execution was a logical first step. There were many questions, and many questions still remain today.

After the most recent meeting of that committee, the go ahead was given to move the issue to Government Operations, another standing committee within the Board of Supervisors, who could eventually push the issue of sales tax sharing to a full-board vote.

This isn’t a groundbreaking idea, though. The act of sharing sales tax dollars from the county down to individual municipalities is commonplace. It happens in almost every other county in New York state.

I like the principle behind sales tax sharing. It offers assistance to municipalities, especially small or unique ones that have extenuating circumstances.

Take Junius for example: It’s an incredibly small municipality, but one that generates a significant portion of that sales tax.

Another example: Several small municipalities at the southern end of the county could greatly benefit from any amount of money pushed into their local budget.

It all comes down to taxing. Having greater revenues — or at the very least, an additional revenue stream — helps keep local taxes down.

While no precise plan has been put forward, the broad strokes look something like this:

Seneca County would share a certain percentage (say, 50 percent) of additional sales tax revenue over the current, or expected average for sales tax revenue. If the county typically sees $23 million in sales tax revenue, and in 2018 it drives in $28 million, half of that additional $5 million would be divvied up and sent out to all villages and towns.

This discussion of growing sales tax revenue stems from the opening of the del Lago Resort & Casino in Tyre, which will bring greater traffic and more spending to the county.

While supervisors and mayors around Seneca County seemed to be mixed on how they’d like to see that money split up — whether it be by population, assessed value, or a simple, even split between all — there seems to be mild interest in the subject right now.

Ultimately, it will be a decision for the supervisors. Mayors throughout the county have skin in the game, but they won’t get a vote on the matter, which brings us back to one potential roadblock for this very idealistic plan.

For sales tax sharing to work, it seems that it would require two things to happen:

First, sales tax revenue has to increase. It seems like a forgone conclusion that it will increase to some degree. However, it isn’t entirely clear by how much. Most of those involved seem to just want the mechanism in place; even if it doesn’t yield a huge return in year one, or two, which is a positive sign.

In my estimation though, there is a second requirement to make this system work. Costs and expenses have to be shrinking at the county level. You can have an increase in revenue, but if there also is an increase in expense — whether it be because of a need for greater services in a growing economy or due to growing state mandated expenses — a seesaw effect will be created.

In other words, it comes down to this argument over who is more deserving of spending the money: If a town or village tax goes down, and the county tax is increased, how much is actually gained from the system?

There has to be a better way of addressing the problems that arise at the hyper-local level. Villages and towns are left to fend for themselves, while the county remains the primary beneficiary of sales tax revenue, which is driven by economic development and growth. Small municipalities around the county are stressed by development and growth, which has to be approached with the same big picture mentality that attracts that growth in the first place.

If the county had fewer mandates for which to budget, imagine the benefit that larger entity could be to municipalities within it. Infrastructure — such as water and sewer upgrades, services like fire and EMS and so many more — could all be part of a large, big picture solution that could help every taxpayer across the board.

This column originally appeared in the Finger Lakes Times. Read all of Josh’s columns from the Finger Lakes Times here.

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