Local government leaders from around New York are urging state lawmakers to reverse a sales tax law that diverts more than $59 million from municipalities.
The push comes as lawmakers this week in Albany are expected to approve a state budget, setting spending and revenue policy for the next 12 months.
At issue for local governments is a new sales tax law that leaves them with less money from the sales tax. The sales tax is a primary driver of local revenue for most counties in New York, helping to keep property taxes low in the process while also funding services.
Local government officials also cite the strain the pandemic has taken on their finances over the last year.
“Strong local governments make for a stronger state, and as New York recovers from the economic devastation wrought by the coronavirus pandemic, it is imperative that those of us who have been serving on the front lines of responding to the crisis be provided with the resources and the flexibility we need for a full recovery," said Jack Marren, the chairman of the Ontario County Board of Supervisors. "Now is the time for the state to invest in our communities with state resources, not diverting locally generated revenue for the state’s policies and programs.”
County governments share about 25% of their sales tax revenue with towns, cities, villages and school districts in New York. Local governments shared about $2 billion in local sales tax revenues.
"Intercepting local sales tax revenue to fund the state’s AIM program makes no sense. Under this structure, the villages and towns who receive AIM-related payments are essentially paying for their own state aid," said Binghamton Mayor Rich David. "This irresponsible policy represents the state shirking its financial obligations and shifting them onto local property taxpayers. We urge the State Legislature to put an end to this unreasonable practice of diverting funds intended for local governments to help balance the state budget."