11/30/07 - City’s sales tax request denied

Legislature chooses not to reopen negotiations into sales tax distribution

(As published by Cortland Standard, Evan Geibel reporting)

The county Legislature turned down the city’s request to reopen negotiations over the distribution of county sales tax revenue, but did decide to arrange an early December meeting with city officials to discuss long-range possibilities for saving money.

Legislators Ron Van Dee (D-5th Ward) and Dan Tagliente (D-7th Ward) were the only ones supporting a resolution that could have sped up the rate at which the city and other municipalities would have received larger shares of the total sales tax revenue.

City Director of Administration and Finance Andy Damiano brought up the sales tax agreement and the city’s difficult financial situation in a letter to the editor of the Cortland Standard that was delivered on Oct. 30. A copy of the letter was also sent to Legislature Chairman Marilyn Brown (D-8th Ward).

The city’s fund balance is effectively depleted and taxpayers are expecting a 9.8 percent tax rate increase for 2008.

In 2008, the city would be receiving 18 percent of sales tax revenue under a six-year agreement reached in 2006. The city would receive 18.2 percent in 2009, and the towns and villages would split the remaining 29.8 percent.

The county expects to take in just over $12.7 million in sales tax revenue this year, while the city expects to take in about $4 million.

Under the new agreement, the county will gradually reduce its share of the revenue from its current 56 percent to 52 percent by 2009.

In his letter, Damiano asked that the distribution be returned to its pre-2004 levels — the county had been receiving 52 percent, the city had received the 18.24 percent it would be returned to in 2009 and the other municipalities had received a combined 29.76 percent.

Van Dee said the county, had it decided to reopen negotiations, would have likely sped up the distribution schedule so the city would receive 18.2 percent next year.

Although Legislator Merwin Armstrong (R-Cuyler, Solon, Truxton) had been concerned about the other municipalities losing out on sales tax revenue if the city request had been honored, Damiano pointed out this morning that under his plan, the other towns and villages would have received a larger percentage of the total revenue than they would under the current agreement.