Sales-Tax Revenues Jump, Town Board Members Seek Share

Putnam says it distributes money by paying bills

By Liz Schevtchuk Armstrong

At least on paper, Putnam County’s annual sales-tax revenue rose in 2016 by 9.5 percent, the second-highest increase of any county in New York.

In reality, the rise is less rosy than it seems.

According to Putnam County statistics and a Jan. 30 report from the New York State Comptroller’s Office, the county’s sales-tax income grew to just over $59 million in 2016 from just under $53 million in 2015.

However, most of that upswing reflects what the Comptroller’s Office termed “distribution adjustments” across years, due to the arrival of late or revised returns or to unspecified “technological” tweaking. Such adjustments to the data for Putnam and two other counties with notable increases boosted their numbers.

Putnam County Finance Commissioner William Carlin said the adjustments, totaling $2.7 million, accounted for more than half of the 9.5 percent rise. He also explained that the state does not reveal exactly why adjustments occurred and noted that this was not the only time Putnam has seen the adjustments affect its numbers.

Nonetheless, in recent years, Putnam’s sales-tax income has gone up.

Carlin said that from 2014 to 2016, sales-tax revenue rose by 5.7 percent. “Certainly that tells a different story than a 9.5 percent increase in one year,” he said, noting that sales-tax income can fluctuate dramatically. “In 2008, Putnam had the highest sales-tax growth,” he noted, but a year later, it “had the highest decline in the state.”

Sales-tax revenue throughout the state rose by 2.3 percent last year, which the Comptroller’s Office considers “sluggish.” However, the Mid-Hudson Valley had the best regional increase at 2.9 percent. Dutchess County revenue rose 1.4 percent and Westchester’s 1.3 percent. Chautauqua County had the largest jump, 12.7 percent, after raising its sales-tax rate.

Sales Tax Facts

+ The sales-tax rate in Putnam County is 8.375 percent and in Dutchess, 8.125. This includes the state tax rate of 4 percent, plus the county rate, plus a commuter tax of 0.375 percent. The state’s highest rate is in New York City, at 8.875.

+ Outside of New York City, 11 of 57 counties, including Putnam, do not share sales-tax revenue with local governments. (None of the 11 have cities.) Under a formula it adopted in 2013, Dutchess County distributes a flat $25 million from the 3.75 percent it collects. Poughkeepsie receives 38 percent ($9.57 million) and Beacon 17 percent ($4.16 million).

+ Ninety-three percent of New York residents pay at least 8 percent. The highest rate in the nation is in New Jersey, where some residents pay 12.875 percent.

Source: Office of the New York State Comptroller

Unlike 46 of the 57 counties outside New York City, Putnam County does not share the sales taxes collected, a longstanding point of contention in Philipstown, where many tourists spend their cash.

At the Philipstown Town Board meeting on Feb. 16, Councilor Nancy Montgomery said the $5 million rise in sales-tax revenue between 2015 and 2016, although exaggerated by the state adjustment, still “makes us wonder once again what we are going to do about getting” a portion. The adjustment, she said, “does not mean there wasn’t some growth; even if there wasn’t, we are still looking to get our fair share.”

Councilor Mike Leonard proposed that the county use some of the higher revenue to replace funds it cut from its allocation for the upkeep of historic cemeteries. That appropriation dropped from $12,000 in 2016 to $8,000, divided among six towns. The county can afford to put at least $4,000 back, he said.

Source: Office of the State Comptroller

Leonard said Feb. 27 that cemetery committees from the six towns hope to convince County Executive MaryEllen Odell and legislators to restore the funding. The consistent rise in sales-tax revenue “should have delayed their need to cut what is clearly a shameful, low amount to begin with,” he said. “I would have found a way if I was handling the county budget. But then you have to care, first.”

Odell relies each year on sales-tax revenue to fill county coffers. In the projected 2017 budget, it accounts for 37 percent of projected revenue. (Other sources include property taxes, state and federal funds, and fees collected by county agencies.) When Odell went through the numbers at a public presentation in October, she called sales-tax revenue “critical to financial stability of the county” because it “offsets the need for higher property taxes, and/or reducing services.”

Philipstown Sales-Tax Revenues

3/1/2013 to 2/28/14 3/1/14 to 2/28/15
Zip code 10516 $1.2 million $1.3 million
Zip code 10524 $1.1 million $1.1 million

Carlin maintained that the county already shares sales-tax revenue, “not the actual cash” but “by paying for such services such as community-college tuition and election expenses not presently charged back to municipalities, as is done in other counties.” Most important, he said,  Putnam “guarantees 100 percent of the property-tax collections of each municipality in the county” — covering losses when someone fails to pay.

“That creates a demand on our cash flow that requires the county to keep these funds,” he said. Otherwise, it would need to borrow the money, which is “not a scenario that we would recommend.”

Carlin also observed that the county uses sales tax to fund actions mandated by state or federal governments. “As long as there is no meaningful mandate relief,” especially given the state tax-cap that limits how much municipalities can raise property taxes each year, he said, “the pressures on the county budget will be too great to share sales-tax revenue. The numbers simply won’t add up.”

So far this year, the sales-tax fortunes look promising. A chart provided legislators for a Feb. 27 meeting showed that in January the county collected $4.47 million, or $237,300 more than the same month last year.

3 Responses to "Sales-Tax Revenues Jump, Town Board Members Seek Share"

  1. Michael Leonard   March 3, 2017 at 6:01 pm

    Once again Putnam County officials are missing or ignoring the question. So let me ask it again, despite it being asked numerous times before. Why not share the excess sales tax received that is not spent for items listed in the article by county response with each town? This helps create incentive for towns to create even more ways to increase sales tax since they would directly benefit from it. Let’s try it for a year on a trial basis and see what happens. You may be pleasantly surprised of its results. Great article.

  2. Patty Villanova   March 4, 2017 at 1:47 pm

    If you look at your town/county property tax bill that you get at the beginning of the year, you will notice that the county tax is much lower than the town portion of the bill. The reason for this is because a good portion of our county budget is paid for by sales tax as opposed to straight property tax. (Compare both of these to your school tax bill, which is based on real estate). The truth is that the county tax is actually a good deal because the costs are spread around among many more people via the sales tax. It would cost all of us a fortune if the county did not pay the bills that they do. This argument has been going on forever or so it seems, and I doubt that things will change any time soon.

    But, there is an answer, something that can be done by all the local politicians who are always demanding more and more money for their own fiefdoms. The answer is — drum roll please — our elected officials need to get off their rear ends, go to the Legislature and demand the services that our towns, yours and mine, so desperately need. It’s so much easier to whine and complain but that’s never going to do anything.

    You want a perfect example of what I’m talking about? Cold Spring tourism for starters. I have been writing about this subject and how badly we are getting screwed by the county, for years. Unlike the politicians around here, I have actually been going to the county, demanding that we get our fair share of the tourism budget from the Legislature. Speaking of which, if there ever was a no-show job, being a county legislator is one of them. How many residents even know who their legislator is let alone what they are supposed to be doing for them?

    It is about time that the members of the Philipstown board and their colleagues in Cold Spring start making their presence felt in Carmel. Make a point of lobbying Barbara Scuccimarra (she’s our representative) and asking her why we aren’t getting a bigger piece of the action.

    For that matter, they need to go to the committee meetings and demand we get a bigger share of county services in return for all the tourism money that we bring in. At one point there was over $300,000 in the tourism budget but I can assure you that Cold spring received very little of it even though we are the top (some say the only) tourist attraction in the County.

    The only reason the county gets away with this is because they know that the local pols are so busy complaining about not getting a direct share of the sales tax that they’ll leave them alone to do their dirty work in relative private.

    Folks, let’s get real. In a few weeks there’s going to be an election in Cold Spring. Wouldn’t it be nice if the people who are running for office at least started discussing this and making it a campaign issue? If we can’t get our share of the sales tax, we must at least demand the hundreds of thousands in services we are entitled to.

  3. Patty Villanova   March 5, 2017 at 9:38 am

    Sorry, but I almost forgot to thank Liz, Holly, Michael and the rest of the Highlands Current staff for their excellent work and fine articles about Putnam County government. County government is a mystery to most residents and few reporters have the stamina to document so meticulously its day-to-day workings, let alone publish their findings on a regular basis. For too many years the legislators have enjoyed all the perks of their no show jobs with little or no scrutiny. It’s about time the taxpayers found out just how little we get for our money.

    Keep up the good work. It is greatly appreciated!