With New York set to remove its 4 percent sales tax on clothing and footwear, counties are being urged to follow suit and drop their three or four cents worth.
If they do, school boards and local governments in Western New York may struggle with how to deal with the reduced income, which nears $18 million annually in Erie County, the budget office estimates.
"As far as I am concerned, any loss of income that we have to make up in increased property taxes is not desirable," West Seneca school treasurer Brian Schulz said. His School Board shares that opinion, even though the district would lose just $211,000 of its $70 million annual school budget.
Conversely, the Orchard Park School Board -- which was elected on a tax-cutting platform -- last week went on record favoring the apparel sales tax cut, which would cost their district $149,600 in revenue. They judge that the revenue loss would add just $12 per home to the school tax bill.
That's equivalent to spending $300 on clothing and paying 4 percent sales tax on those items.
Erie County towns and villages, as well as the cities of Buffalo, Lackawanna and the City of Tonawanda would lose revenue, too -- with Buffalo losing $1.2 million. So far most governments and school districts have indicated to County Legislature Chairman Charles Swanick that they oppose slicing the sales tax, a position Swanick shares.
"As far as I am concerned, paying for government with property taxes is a negative," Swanick said. "If you fix up your home, you get assessed more. If you let it degrade, you might see taxes lowered. Property tax hurts older people with deep roots in the community and it hurts working people struggling to buy a home.
"Sales taxes hit everyone equally," Swanick said, "and every visitor to the area, every out-of-towner here for a Bills, Bisons or Sabres game helps pay the cost of schools and government.'
Erie County collects about $800 million in sales tax annually, splitting it evenly with the state's general fund.
The county's $400 million is split this way: $200 million to the county, $100 million to the county's three cities, $29 million to school districts and $25 million to towns and villages. The Niagara Frontier Transportation Authority gets a slice, too.
The local 4 percent tax on clothing and footwear accounts for $17,966,760 of the total $400 million in total sales tax revenue.
"You cannot cut taxes without a concurrent cut in services," said Swanick, who suggested that cutting county jobs and consolidating departments is helping the county lower its property tax burden.
"Anything that does that is good," he said, "and while I do not know the mood of the Legislature, we plan to act on this one way or the other in the spring. I have asked all the entities affected to send me comments or a resolution telling me which way they lean."
Buffalo would be very hard hit. Besides losing $1.2 million clothing tax income on the city government side, it would also lose $1.2 million in revenues for the Board of Education.
"That is a significant amount of money to overcome," said Mayor Masiello. "Our alternatives are to raise property taxes, institute new fees or make cuts to absorb that amount."
The same problem is being faced by every village and town in the county. But, unlike school districts, the voters do not have a direct say on their budgets.
"West Seneca's school budget is $70 million," said Schulz, "and we get $6.7 million of that from our share of county sales tax revenues. A loss of $211,000 does not look like much, but it translates to roughly 20 cents per $1,000 in valuation -- say about $15 a year to the average household."
But West Seneca, which has managed to trim costs and hold the school budget down, has been particularly hard hit by revenue losses in recent years.
"Last year alone we lost $260,000 in tax revenue because seniors who came in to file for STAR relief realized for the first time they could have property assessments lowered. So they did. And we've lost both industrial tax base and commercial tax base in recent years, too," Schulz added.
The county's other school districts face similar problems and share his worries.
Ken-Ton estimates removing the sales tax on apparel will cost them a half of one percent of their total revenue, which could add about $6 to the annual school tax on the "average' home.
That seems to be the potential tax hike for a $100,000 home in Williamsville, the county's largest suburban school district, which will lose $301,000 in sales tax revenue if the apparel tax is dropped.