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Erie County sales tax revenue fell $15 million short of projections

Sales tax collections in Erie County fell $15 million short of projections last year, thanks in large part to lower gas and energy prices, but county leaders said they do not anticipate any negative consequences in this year’s county programs and services.

“I feel pretty good going into 2016,” said County Executive Mark Poloncarz.

Despite not meeting the projection, the sales tax revenue still increased by 2.3 percent over the 2014 amount.

“It was growth, which is what very few counties in New York State had,” Poloncarz said.

Local sales tax collections declined in 30 of the 57 counties outside New York City last year, according to State Comptroller Thomas P. DiNapoli.

In Western New York, only Erie and Cattaraugus counties saw an increase in sales tax revenue last year, according to the state comptroller’s report. Niagara, Orleans, Genesee, Wyoming, Chautauqua and Allegheny counties collected less sales tax than the year before. Niagara County saw a decline of nearly $860,000, or less than 1 percent.

“The unpredictability in sales tax collections continues to have financial ramifications for our local governments and their bottom lines,” DiNapoli said in a statement.

Total sales tax collections across the state grew by 3.6 percent, with most of that increase driven by New York City. Excluding New York City, local sales tax collections grew by less than 1 percent.

A sharp decline in the cost of gasoline, natural gas and electricity depressed Erie County sales tax revenue in 2015, said Robert W. Keating, the county’s budget director.

Poloncarz also said the weak Canadian economy meant that county retailers collected less in sales taxes from cross-border shoppers.

Of the sales tax the county collects, 45 percent is passed on to local cities, towns, school districts and the Niagara Frontier Transportation Authority. Erie County keeps the remaining amount, which accounts for a fourth of all the money the county raises each year.

For the portion of sales taxes it keeps, Erie County will receive $8.4 million less than what was budgeted last year.

“It’s a big deal,” Keating said. “But fortunately, we have other things to offset it.”

Though revenue fell short, Erie County experienced greater-than-expected savings in Medicaid and utilities costs, as well as Public Works expenses related to winter street maintenance and supplies, Keating said.

The county still expects to show a small budget surplus for 2015, Keating said.

Given last year’s lower-than-anticipated sales tax growth, the 2016 budget includes a much more conservative sales tax growth projection, Keating said.

email: stan@buffnews.com