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September 21, 2018 - 12:09pm

Local leaders meet, hash out issues with plan to share sales tax revenue

posted by Howard B. Owens in sales tax, news, notify.


It was pretty clear at a gathering of local leaders at County Building #2 on Thursday night that few elected officials in Genesee County's towns and villages are happy with the county's plan for how it will share sales tax revenue.

It was also clear that the county has few options.

The current plan is for the county to cap the amount of sales tax revenue it annually sends to towns at villages at 2018 levels for 40 years.  

Sales tax revenue has been a significant portion of revenue for local jurisdictions -- it's 51 percent of the Town of Le Roy's revenue, for example -- enabling local officials to hold down property taxes.

Now those officials fear the economic impact of seeing sales tax revenue shrink relative to rising costs and what it will mean for property owners in their jurisdictions.

"This agreement is a burden on the towns and villages," said Michael Plitt from the Town of Darien. "It will mean towns have to impose higher property taxes or cut services."

From the county's perspective -- as shared by Bob Bausch (top photo), chair of the County Legislature -- the county has few alternatives.

  • The state is forcing the county to build a new jail, which will cost local taxpayers $50 million, or more, plus interest, over 40 years;
  • The state is imposing new requirements, called "Raise the Age," for how criminal defendants ages 16 and 17, are handled by law enforcement, the courts, and corrections, which will cost the county $2 million to $3 million a year -- a cost the state says it will reimburse the county for but only if the county stays under the property tax cap;
  • The county is facing $75 million in expense to replace aging bridges and culverts.

The county's proposal for sharing sales tax revenue capped at the 2018 rate is an explicit attempt to keep more sales tax to help pay for the new jail.

Bausch pointed out that 80 percent of every property tax dollar collected locally goes to cover state-mandated expenses. Legislator Andrew Young added that the county has only two revenue streams -- property tax and sales tax; and with property tax, the levy is capped so the county doesn't have the option to raise property tax to pay for the jail, that leaves sales tax as the only option.

Young also pointed out that Genesee County is the most generous county in the state for sales tax with towns and villages. Maybe if its share was more in the middle of the pack over the past 10 years, the county wouldn't be in the situation it's in now.

One of the chief objections to the plan for town and village leaders is that the agreement would last 40 years.

Rob LaPoint, deputy supervisor in the Town of Pavilion, calculated inflation going back to 1977 and pointed out that a dollar 40 years ago is worth 25 cents now, at that rate, the county will gain $625 million over 40 years.

"You could build 10 jails for that," LaPoint said.

Both Bausch and Young indicated the county is willing to adjust the 40-year time frame. Young said he favors 15 years.

"If it is a 15-year agreement in place, I know I won't be around, at least I hope not," Young said. "The Legislature in 15 years might decide to take more money."

The county isn't obligated under state law to share any sales tax revenue with the towns and villages. Bausch pointed out that the county could make the amount to share an annual budget decision.

Bausch said without an agreement, he couldn't obligate future legislatures to any particular amount of revenue share.

Some in the audience expressed concern that the City is getting a better deal than the towns and villages. While the amount of new sales tax revenue that will flow to the City will be restricted under its agreement with the county, it is not capped.

The City has more leverage because it can legally override the county sales tax and impose its own sales tax, something the villages and towns can't do.

However, Steve Barbeau pointed out that the City doesn't have that much leverage because most of the sales tax in the county is generated by businesses outside of City limits. 

Legislator Marianne Clattenberg said the City has much higher expenses than the towns and villages. It has its own police department and fire department but it is also the site of most of the tax-exempt property in the county, including the jail, the courthouse, the Old Courthouse, and County Building #1, yet the city must protect those buildings with its police and fire departments and plow the roads that lead to them without collecting the property tax to pay for those services.

David Hagelberger, supervisor for the Town of Darien, wanted to know why the county didn't deal with the jail issue sooner. Bausch said the county wasn't was aware of the looming issues with the jail, but that while it owned the County Nursing home, losing $2 million to $3 million, it really didn't have the ability to deal with the jail or roads and bridges.

While Hagelberger shared many of the same concerns about the length and nature of the agreement and burden it will create for local jurisdictions he also said, "the jail is really all of our problems" and that one way or another everybody in the county was going to have to help pay for it.

Also unique to Genesee County in New York is the county's responsibility for all of the roads and bridges in the towns and villages, which ends up being a cost savings for local jurisdictions, something Carol Glor, supervisor for the Town of Oakfield, said she appreciated.

"We just got two new bridges in Oakfield that are worth well over $2 million," Glor said. "There is no way we could have taken on that expense in our budget."

John Roach
John Roach's picture
Last seen: 18 min 32 sec ago
Joined: May 29 2008 - 5:22am

I disagree with Mr. Bausch, the problem with the jail has been known for a long time. The Legislators just did not want to spend millions of dollars on a new one, and they would not do it now except the State of New York has forced their hand.

Billie Owens
Billie Owens's picture
Last seen: 9 months 3 weeks ago
Joined: Mar 23 2009 - 1:22pm

John, the fourth paragraph from the end of the story was corrected this afternoon by me after Howard noticed his error in quoting Bausch as saying "the county wasn't aware of the looming issues" with the jail -- Bausch said it WAS aware. We regret the error.

Norm Itjen
Norm Itjen's picture
Last seen: 5 days 15 hours ago
Joined: Aug 31 2008 - 6:27pm

The County is correct they are being forced to build a new Jail and it is very long overdue. If they are going to use sales tax revenue to pay for the Jail they should treat all Genesee County tax payers equally, Cap the Towns, Villages and the City of Batavia at the 2018 rate for only a 10 to 15 year period. The majority of sales tax revenue comes for outside the City of Batavia, let the City impose their own sales tax. The great citizens of Batavia should pay should bear the same burden as everyone else in the County will have to.
I would recommend that everyone contact there elected officials and let them know your thoughts on this issue. If it goes through as proposed last night Towns and Villages will have to raise taxes or limit services in the very near future.

Dave Olsen
Dave Olsen's picture
Last seen: 6 days 45 min ago
Joined: Oct 12 2008 - 11:48am

State mandates such as a new jail are a prime reason why Genesee County residents and the good people all across New York State should research Larry Sharpe for Governor and consider voting for him. All is not lost. We can take our state back. Larry will end as much state control over local budgets as he can. Larry wants counties and municipalities to decide for themselves what they need, not Albany. www.larrysharpe.com/

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