Local governments in Genesee County stand to lose $8 million in sales tax revenue for 2018 because the State Legislature has failed to pass legislation that would allow the county to collect an extra 1 percent in sales tax.
Every two years, the Senate and Assembly must pass legislation that allows Genesee County, along with 52 other counties in the state, to collect that extra 1 percent.
This session, that didn't happen, because of a tussle in Albany over extending mayoral control of New York City schools. The sales tax extension, along with extensions related to mortgage tax and bed tax, got caught in the crossfire.
County Manager Jay Gsell informed members of the County Legislature yesterday of the bad news, but this morning he said he was feeling hopeful after Gov. Andrew Cuomo ordered legislators to return to Albany for an extraordinary session.
The governor has the authority to order senators and assembly members to return to session, but he can't require them to take up the agenda he requests. It is Cuomo's wish, however, that legislators take up the NYC schools issue.
The hang up over the legislation appears to be in the Senate. This morning, we requested a comment from Sen. Micheal Ranzenhofer and have yet to receive a response.
In New York, the state has an across-the-board 4 percent sales tax. In the 1980s, the State Legislature allowed counties to impose a local 3 percent sales tax, in part, according to Gsell, to offset the new Medicaid mandate. Counties then had the option to tack on another 1 percent sales tax, but that tax must be reauthorized every two years.
Until this year, that reauthorization has been pretty much automatic.
In Genesee County, under current agreements, the county keeps half of the 4 percent in local sales tax, and the other half is divided between the city, villages and towns.
Prior to this morning's announcement by the governor, it didn't look like the Legislature would take up the extension issue until the fall, which Gsell said would be too late for the county's 2018 budgeting timeline, with a requirement for a completed budget by Thanksgiving for the County Legislature to approve.
UPDATE 11:58 a.m.: Daniel Aikin, spokesman for Sen. Ranzenhofer, provided this statement:
The New York State Senate approved legislation to extend Genesee County's sales tax on June 8th. It passed by a vote of 58 to 3. The existing sales tax extension expires November 30th of this year. The bill was delivered to the New York State Assembly on June 8th. Weeks later, the Assembly still has not taken action on the bill.
Unfortunately, the New York City dominated State Assembly failed to act, causing an unnecessary and avoidable budget issue for municipalities. If the State Assembly does not pass this legislation, then the budgets of cities, towns, and villages across Genesee County will be negatively impacted. Senator Ranzenhofer is hopeful that the State Assembly will take action before it is too late.
The Democrats in the State
The Democrats in the State Assembly should not have attached this NYC school issue to our sales tax request.