Recent reports from the Cortland County Legislature and the Office of the State Comptroller (OSC) municipalities across New York have seen an uptick in sales tax.
Cortland County generated $39.1 million in sales tax in 2022. The current pace of sales tax generation seems to indicate the county could be raising more revenue from sales tax this year. Just in January alone, Cortland County collected about $3.3 million in sales tax, signifying an 11% increment from last January, according to a recent report from OSC. In Jan. 2022, the county collected about $2.9 million.
“All counties rely on just a few funding streams, which are property taxes, sales tax, and state and federal revenues,” said County administrator Rob Corpora. “The only revenue stream the county has any control over is the county property tax.”
Corpora said that the current upturn in sales tax may not be a stable predictor of where sales tax generation is headed.
Due to the COVID-19 pandemic, as well as irregular spending of consumers, and the unavailability of large-ticket items, it is hard to predict how much in sales tax will be raised, he noted.
“Last year in January we were up over 25% from the 2021 and ended the year about 5.5% up,” Corpora said. “This year we are starting at 13% over 2022 for January and we do not know where we will end up.”
But what can the county use this money for?
“There is no singular or group of items paid for by sales tax revenues just like property tax revenue,” Corpora noted.
Corpora, however, provided some examples that illustrate what sales tax could be used for.
One option would be to fund public safety departments, including law enforcement, the improved emergency response dispatch center, potential improvements to the county jail and staffing at the district attorney’s office. Corpora added funding could go to other central departments like finance, IT, personnel, and buildings and grounds, all of which are seen as mandatory services.
Another option could be to cover the cost of new state proposals included in Gov. Kathy Hochul’s 2024 budget. The budget must be approved by the State Legislature by April 1.
One of these proposals includes a 40% increase in the hourly rate paid to public defenders.
“The attorneys should receive an increase but this is a state responsibility that is being pushed onto local governments,” Corpora said.
A potential loss of revenue facing all counties in the state is another potential area sales tax could go to.
The governor’s $277 billion budget proposal diverts an estimated $626 million in federal Medicaid funds that counties were meant to receive over the course of next year. Upstate counties would have to spend about $280 million more in insurance costs. For Cortland County, this means being on the hook for $1.3 million in Affordable Health Care Act expenses.
The state has provided these federal funds to counties since 2003. The use of sales tax revenue to potentially cover this looming gap would be a way for the county to avoid raising property taxes.