7/7/07 - County sales tax revenue off by about $200,000 through midyear

(As published by Cortland Standard, Corey Preston reporting)

Midway through 2007, sales tax revenues in Cortland County are lagging about $200,000 behind where they were at this point last year, prompting concern from county officials over a shortfall in revenues by year’s end.

Through July 2, the gross sales tax revenues Cortland County had brought in totaled about 46 percent of the budgeted $23.1 million for all of 2007, according to County Treasurer Don Ferris.
Through the same date last year, total revenues were $219,000 higher than this year, Ferris said, and those revenues at the time added up to about 48 percent of the budgeted $22.7 million for 2006.

“You can never tell for sure how it’s going to play out, but if we continue on that trend, 2 percent behind, we would come up short,” Ferris said, noting that, if current trending continues, the overall revenues would come in $462,000 beneath the projected $22.7 million.

Due to a new distribution formula negotiated last year, 55 percent of that $22.7 million, or $12.7 million, would go to the county government, with 17.75 percent going to the city of Cortland and the remaining 27.25 percent being divided among the county’s towns and villages.

“I guess I’m more concerned with some of the towns that rely on our projected figures to budget, because they may come up a little short,” Ferris said. “There are a few towns (Solon and Lapeer) that leave all of their sales tax with the county to reduce their tax levy and they could conceivably end up owing the county money, although it wouldn’t be a very large sum.”

County Administrator Scott Schrader said he was hopeful the revenues would pick up at the end of the year, but if not, the county could see a roughly $200,000 shortfall from its budgeted share.

Still, he said the county would likely be able to weather such a shortfall.

“It’s always best if we meet the budgetary forecast, and this is definitely something to pay attention to, but when you look at it over a more than $100 million budget, there are ways to mitigate that lack of revenue,” Schrader said, noting that decreased spending in some areas or interest earnings from the county’s fund balance could potentially help cover the shortfall.

“We’re not going to know for sure until the end of the year.”

Both Ferris and Schrader said there’s been little growth locally in sales tax revenue for a number of years.

Ferris noted that the county met its projected revenue in 2006, but that the numbers likely received an early bump of approximately $300,000 because some revenues were held over from 2005 to 2006 due to a transit strike in New York City in December 2005.

“To assume increased sales tax on gasoline sales is somehow a bonus I think is a mistake, because there’s only a finite amount of discretionary money to spend,” Ferris said. “Basically if you’re spending more money on taxable gasoline sales, you’re not going to be spending it on taxable clothing sales.”

Schrader agreed.

“Right now we have a stagnant retail and commercial economy because there’s a lack of new commercial and retail businesses,” Schrader said. “If we had, for instance, a Home Depot here, and we were capturing dollars people were spending on home improvement in Ithaca or Onondaga County, that would make a difference, but we don’t have the new Target, the new Home Depot, we don’t have the new tourist attraction that Hope Lake has the potential to be.”
Schrader said he was concerned that a lack of development in recent years will hurt the county in the long run.

“I think the resistance to development hurts the economy of this county because it doesn’t allow for the generation of income from sales tax,” he said. “The only way to ease the tax burden is through development, and we haven’t seen that here, and eventually it’s going to come back and bite us in the form of higher taxes.”

ANYONE ELSE SMELL HIGHER TAXES COMING?????