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January 19, 2012 - 6:55pm

Extra sales tax money won't necessarily go back into programs that were cut

posted by Howard B. Owens in genesee county, taxes, sales tax.

Genesee County will likely close the financial books on 2011 with an unexpected revenue surplus and County Treasurer Scott German is recommending the legislature roll the money over into its reserves.

The extra money will likely come from a windfall of $997,000 in sales tax revenue that came in above budgeted expectations.

At Wednesday's Ways and Means Committee meeting, Legislator Ray Cianfrini asked if the 2012 budget could be amended so some of this unexpected revenue could be directed at programs cut in 2012, such as Meals on Wheels, which is being forced to reduce delivery days.

In an interview Thursday, German said the legislature could do that, but his recommendation is that the money be held in reserve.

Reserves, he said, should be used for emergency expenditures, such as a bridge falling down, and not to fund programs legislators already decided already to cut.

"Under the tax cap, the legislators still had room to raise taxes if they wanted to fund those programs," German said. "The fact the sales tax came in better than anticipated, that's not a good justification to fund a program."

The treasurer said he anticipates the county will close its books on 2011 -- which happens in March -- with $13.2 million in revenue, up from the anticipated $12.2 million.

Total sales tax for the county -- which is shared among the county and various municipal agencies -- was $35.2 million, beating the 2008 record of $34.3 million.

Higher gas prices and the three-week close-out sale at Lowe's were probably the main contributing factors to the strong sales tax numbers, German said.

Is the local economy improving?

"I would hope that would be the case, but that would be speculation," German said. "I would hope business is getting better."

Lisa Falkowski
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Can't spend the excess on cut programs? Need to use it for "emergencies."
What bigger emergency that a starving, isolated senior!
This money should go back directly to the people it was taken from.
This article is BULLSHIT!

John Roach
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Lisa,
I understand your point, but no senior is starving because of any cut. They still get the meals. What they don't get is the visit and check up on them. I still say take the money from the GCEDC for the senior program and put the unexpected surplus into the road and bridge fund.

Beth Kinsley
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John, it was my understanding that the program was being cut down from 5 days a week to 3. Is that incorrect?

Lisa Falkowski
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John,
I appreciate you setting me straight. My opinion of this article does not change, though. LOL ;)

John Roach
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Beth, yes it is being cut to three day delivery, but the food will be delivered for the other two days at the same time.

Beth Kinsley
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I see. Thanks John. I still hate to see any cuts to this program.

Howard B. Owens
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I don't think I explained well what Scott German was saying ... prudent budgeting would preclude a knee-jerk "let's spend this money because we've got it" attitude.

I remember back in the go-go '90s in California, I watched rather flabbergasted as the California Legislature decided there wasn't any kind of expenditure they didn't love. "Surpluses? What surpluses? We've got money to spend and gosh darn, we're going to spend it!"

Which led to new permanent costs in the state, which has played a big role in the deficits they've been facing each of the past several years.

You don't just spend money because you have it.

Genesee County has an abundance of financial needs -- including, no joke, bridges that might fall down. It's going to be kind of hard to get a meal to some elderly resident if the bridge between here and his or her house washes out.

My hope would be that whatever the legislators decide to do with the money, they take the long view, a prudent and judicious approach. I'm not advocating one course of action over another, but socking money away for a rainy day is never a bad idea.

If California and New York had done that in the good times, the bad times wouldn't have been so bad.

Mark Potwora
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How about this idea..lower our property tax rate..This is money ,sales tax money that we taxpayers spent on gasoline...So it is money taxpayers paid extra for high gasoline prices...You know, the people that drive cars in this county,,The ones they raised car registrations with the new county surcharge on..... They take 1% of the sales tax and dedicate it to bridges already..Yea don't give back to the taxpayer ..I'm sure Mr.German will be getting a raise this year,in fact most of the county employees will be getting raises this year..So lets keep the taxpayers money ...........He also said "Under the tax cap, the legislators still had room to raise taxes if they wanted to fund those programs," German said. "The fact the sales tax came in better than anticipated, that's not a good justification to fund a program."..Raise taxes...... Is he for real,they just picked up and extra million...Got wonder about his back ground in being county treasure if he didn't see this coming..,Just a while back he said sales taxes were way down.....Lisa said it right BS....Its not his call to make to raise taxes,that is why we vote for county legislators to make that call...I think they saw this much sales tax revenue all along toward the end of last year when they voted for those cuts..But if they told us they were going to have this much sales tax revenue people would of been up in arms..They would of never got the cuts through an never been able to create the new car surtax.....

Howard B. Owens
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Where did he say he wanted to raise taxes?

Dave Olsen
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How about cutting the sales tax rate back say 1/2% or even 1%. That might actually raise consumer spending by enticing people to shop here instead of Erie or Monroe Counties and we could make even more revenue. Theoretically.

Dave Olsen
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OK, I'm going to prove how boring I am since this is what I'm doing on a Friday evening.
A. I'm wrong Erie Co. does have a higher tax rate: 8.75. Still, if ours was even lower, it'd be a good thing.

B. My apologies didn't mean to confuse anyone. Had to edit, because I forgot that the county only keeps the amount over the 4% cut the state grabs. So, if Gen Co. takes in 13.2 million on a tax rate of 8%, and keeps half, by my calculations there were total taxable transactions of 330 million dollars. At 7.5% we'd have wound up with 11.5 million, to bring it to 13.2 for the county, we'd need to increase sales to 378 million, Roughly 15%. And if we went down to 7% then you'd need taxable sales of 440 mill in order to take in 13.3 of tax revenue. Which is about a 34% increase in total taxable sales. So the question is: Would lowering our sales tax rate to 7% gain us 110 million dollars or 34% more business?

Dave Olsen
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Howard B. Owens
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Dave, don't have the budget in front of me, but I'd start with XXX amount projected sales tax revenue for 2012, reduce that by $900,000 (if that truly does turn out to be the actual number), and then calculate from there -- what would be the increase in sales necessary to close the $900,000 gap.

I would argue, be prudent, and calculate a sales tax decrease should only require a 10 or 15 percent increase in sales. For an experiment like this, 34 percent seems a bit much, though if it worked, you could try another cut the next year.

Then market the hell out of it in the neighboring counties along the thruway -- "lower taxes in at Exit 48A means lower gas prices!"

Dave Olsen
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Oh, hell yeah. Big ol' billboards at each county entrance on main routes. "Everything's cheaper in Genesee County" . I agree 34% probably is a bit much, but like you said we have a $997,000 head start. Then stop paying GCEDC bonuses and we'll have a little more in the kitty.

Mark Potwora
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Howard to me he is saying if you want those programs back ,you will have to go back and raise the tax rate..That would be advocating raising taxes..."Under the tax cap, the legislators still had room to raise taxes if they wanted to fund those programs," German said. "The fact the sales tax came in better than anticipated, that's not a good justification to fund a program."To me collecting over 13 million in sales tax could be the norm...And maybe they were budgeting that item to low...Also how much more does that mean for the city of Batavia..Malino claims that they will be 200,000 dollars short ,and that they need to raise the tax rate...So i guess no need for that now...The city has also had a mild Nov and Dec last year ,so i would think that plowing and over time costs should be almost nil...big saving there...Put the two together and you don't need any increase...

Howard B. Owens
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He's not saying that taxes should be raised.

He's saying if the legislature had wanted to fund those programs, they could have raised taxes more.

That's not at all the same as saying taxes should be raised. Why isn't that clear?

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