Low sales tax revenues will drive budget back up

By Patsy Nicosia

Schoharie County's sales tax numbers now look to be down by as much as $750,000 by year's end.
Which means 2016 taxes will need to go up even more than expected to make up the difference.
Supervisors had managed to trim the tax levy increase in the tentative $72.1 million budget from 5.8 percent to 2.5 percent.
But that was before they got the bad news from County Treasurer Bill Cherry Thursday.
Figures Mr. Cherry had gotten just two days earlier show sales tax revenues for September are down $464,508 from the same period in '15, continuing a year-long and worsening trend.
Mr. Cherry said Friday that based on where things stood at this time a year ago, he'd projected $14,775,000 in sales tax revenues for '15-and even that was a $200,000 decrease over the $14,975,000 collected in '14.
But now, he said, it's clear the figures will fall far short of that; the difference pushes the tax levy back to about 5.5 percent, he said, even with the cuts supervisors already made.
"I wish there was a better solution," he said. "But the only other option is cutting services. There isn't any other place to cut and there isn't any low-hanging fruit. We're way past that."
The county's January through March sales tax revenues showed a $364,000 loss over what had been expected, April through June showed another $70,000 decrease, and July through September's figures, a $314,000 loss for a total decrease of about $750,000.
In the beginning, Mr. Cherry said, the figures were worrisome, but could be blamed on things like the horrendous winter of 2015.
"But it's pretty clear now that we're not going to reach our projections," he said.
Mr. Cherry said there's no obvious reason for sales tax revenues to be down so dramatically.
"We haven't seen stores going out of business," he said, and he theorizes it's due residents buying gas across county lines-the county gets no sales tax revenues for those sales-and losses due to internet sales, something virtually impossible to track, even though most purchases are taxed.
Even before the latest sales tax figures, supervisors' Finance Committee had eliminated the creation of economic development positions Mr. Cherry had recommended-something he still believes is essential to turning things around.
But without the cuts the Finance Committee had already made, things would be even worse, taxes would be up 7.5 percent, he said.
Mr. Cherry had expected supervisors to adopt the budget when they meet Friday, but it's not clear if that will happen.
Even if they do, they'll still have to pass a local law overriding the tax cap-something some have already argued against.
But if they adopt the budget and not the tax cap, Mr. Cherry said, it will be a double-whammy for taxpayers:
Tax bills will still go out with the higher figure but the county will have to keep the money that comes back in a "lock box" to apply to the 2017 budget and will be forced into an austerity budget January 1.

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