A new agreement sets how county collected sales tax will be distributed for the next eight years, but some local officials say towns aren’t getting a fair cut.
The Schenectady County Legislature on Tuesday, Sept. 11, approved a sales tax distribution agreement for the start of this December to Nov. 30, 2020. The Schenectady City Council approved the agreement the previous Monday.
Democratic legislators touted the plan as beneficial for all municipalities in the county.
“We are able to keep the county whole, help the city and continue to help the towns as we have been,” Deputy Chairman Brian Gordon, D-Niskayuna, said. “The stability factor here is very important.”
The agreement grants an increase for the city totaling $600,000, to a total of $11.7 million annually. An additional $100,000 will also be distributed to Capital Resource Corporation or the Industrial Development Agency to be used for community redevelopment and demolition of structures, or any other purpose city officials see fit.
Towns will continue to receive a total distribution of about $7.8 million annually, which is to be proportionately split up between each municipality based on real property value. The local proportions will be based on this year’s taxable value and will remain fixed throughout the agreement.
Glenville Supervisor Christopher Koetzle scolded the county legislature for approving the agreement.
“To hold your revenue flat for 12 years is immoral,” Koetzle said. “It is a horrible deal for the towns. … They are leaving all the towns to fend for themselves.”
Rotterdam Supervisor Harry Buffardi, on the other hand, said town officials thought the formula for distribution was “fair and equitable” and was in favor of it.
Niskayuna Supervisor Joe Landry said because towns are not in bargaining process, according to state law, the towns will benefit from continuing to receive the same revenue stream. He said the county could pull funds distributed to towns since there is no legal right requiring it.
“The fact we are provided with monies is something that beneficial to the town,” Landry said. “The county is in a position where they just have to negotiate with the city.”
Also, he said towns could benefit from increased growth through Metroplex’s portion given locally.
The towns’ lack of bargaining power though is what frustrates Koetzle.
“The way it is set up in the state is just crazy,” Koetzle said. “The towns have no position, we have no formal role at the table.”
Towns and villages throughout the county will continue receive to the same revenue stream from Schenectady Metroplex Development Authority, too. From the county’s current 4 percent sales tax, Metroplex directly receives 0.5 percent of the revenue generated. Thirty percent of that portion is given to towns and villages, with the remained retained by Metroplex to help fund economic development projects.
Last year, Metroplex distributed more than $3.3 million of sales tax revenue to municipalities, with Rotterdam at $1.1 million, Princetown at $80,000, Niskayuna at $815,00, Scotia at $289,000, Glenville at $814,000, Delanson at $14,250 and Duanesburg at $215,000. The city and county don’t receive funds directly from Metroplex.
County Legislature Minority Leader James Buhrmaster, R-Glenville, cast the sole dissenting vote against the agreement. He said towns have seen economic development, but the new agreement doesn’t reflect progress made in the suburbs.
“The lion’s share is clearly going to the county and yet an awful lot of this new sales tax revenue is coming from Rotterdam, Niskayuna and Glenville,” Buhrmaster said. “Nobody knew anything about it until they read about it in the paper.”
County Manager Kathleen Rooney pointed to the growth of mandated costs for the county from 1990 to 2012, saying they increased nearly $72 million and are estimated to total more than $100 million this year. Sales tax retained by the county increased almost $45 million over the same time period, with county set to retain nearly $59 million in taxes this year.
Legislature Vice Chairwoman Karen Johnson, D-Schenectady, said it would be risky for the city to choose a preemptive sales tax option and collect taxes itself. Johnson said some of the public doesn’t “totally understand” the situation, which has led to some “adverse comments.”
“I think they wisely determined that this was their best opportunity,” Johnson said. “Some of the members (in the legislature) that represent the city feel very strongly that they made the right decision.”
At the legislature meeting, Jason Planck, a Schenectady resident, claimed the city has lost around $4 million in sales tax over the last four years.
“You’re offering nothing to the city, and on top of it all, where are the towns and the villages?” Planck asked.
Legislator Gary Hughes, D-Schenectady, said if the city were to collect its own taxes the revenue would be much lower at $10.5 million. Also, he said the county doesn’t have any funds left after paying for mandates and sales tax revenue doesn’t cover the cost.
“There is not, in fact, money left on the table,” Hughes said. “I believe we are being fair to the cities and fair to the towns.”