Showdown in Albany Over Sales Tax

Dutchess faced $49M loss, Putnam $14M

By Holly Crocco

The state legislature caused a panic among county executives for about a week after it did not renew legislation that allows New York counties to collect an additional 1 percent sales tax. Putnam County stood to lose about $14 million annually and Dutchess $49 million.

The measure, usually routine, was not passed before the legislative session ended on June 21. But after being called back by Gov. Andrew Cuomo for a special session, lawmakers on June 29 sent an omnibus bill to Cuomo for his signature that extends the sales tax measure for three years.

The state legislature ruled in 2005 that counties could impose an extra half a percent of sales tax for a two-year period, which was increased to a full percent in 2007 and has been extended every two years.

What You Pay

Putnam County: 8.375 percent
County – 3 percent; Extender – 1 percent; State – 4 percent; MTA – 0.375 percent
County share (2017) = $57 million

Dutchess County: 8.125 percent
County – 2.75 percent; Extender – 1 percent; State – 4 percent; MTA – 0.375 percent
County share (2017) = $184 million

The extender this year was tied to mayoral control of New York City schools. Until the Senate and Assembly agreed, the ability of counties to collect 1 percent of their sales tax in 2018 remained in limbo.

The current extender expires Nov. 30, so counties could have seen their revenue dip as early as December without the extender. Counties conceivably would have had two options: raise property taxes or make drastic cuts, such as layoffs.

“In one fell swoop state leaders could undo everything that has been done in the past 10 years to curtail property tax increases,” said William Cherry, president of the New York State Association of Counties (NYSAC), in a statement.

In a letter to state lawmakers, Putnam County Executive MaryEllen Odell urged passage of the extender, noting that sales tax revenue accounts for 37 percent of the county budget. In Dutchess, it’s 39 percent.

NYSAC advised counties to draft their budgets with the expectation they would receive the 1 percent.

In April, the Putnam County Legislature voted 8 to 1 to request that the state Senate and Assembly extend the additional 1 percent sales tax through 2019. Dini LoBue (R-Mahopac Falls) was the lone dissenting vote, saying the county needs to implement cost controls instead of relying on sales tax revenue.