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PLAN TO END SALES TAX ON CLOTHES GETS DIM GREETING

County Legislator Samuel P. Granieri's suggestion that Niagara County repeal its sales tax on clothing is playing to poor reviews from his colleagues.

Granieri, R-Niagara Falls, has introduced the notion as a resolution for Tuesday's Legislature meeting. It's the second consecutive year he's tried it.

Budget Director Sharon Sacco said, "Right now, Niagara County is not in a financial position in the 2000 budget to offer that."

Sacco said Niagara County's payments this year from the settlement of the multistate tobacco lawsuit will be $455,157 less than the county was told to expect last fall, a 13 percent dip.

Including the county's first payment, actually received in December but applied to road projects this year, the county will receive $4,796,161. It was anticipating $5,251,318, Sacco said.

The reasons are attorney fees and a drop in U.S. cigarette consumption, to which the payments are pegged.

In the face of that, Granieri's plan would wipe out the county's 3 percent tax on clothing and footwear that costs less than $110, following along with the state's decision to repeal its 4 percent tax on those items, effective March 1.

Granieri said state law has changed, allowing counties to repeal local sales taxes on clothing one year at a time, instead of having to make a permanent commitment.

"We have a March 1 opt-in date," Granieri said. "We can try it and if it's not working, we can change it."

Chief accountant Paul J. Roman said previous estimates place the lost revenue for the county at between $2.3 million and $2.8 million per year.

"But that's for all clothing," Roman said. He said there were no figures available for the repeal only below $110, although he said it's likely that most clothing purchases would be tax-free.

Legislature Majority Leader and Finance Committee Chairwoman Shirley G. Urtel, R-Cambria, predicted Granieri's proposal will fail as it did in 1999.

"I still am not in favor of it," Urtel said. "I just don't see the support for it." She said the county's surplus is too small and the budget is too tight to give up revenue.

Legislature Chairman Clyde L. Burmaster, R-Ransomville, said before he'd support it, "You'd have to show me where I can make up that lost revenue."

Granieri said the repeal, especially since Erie County is apparently not planning to do it, would give Niagara County a competitive edge.

"We need a competitive edge," he said. "We can lower a tax and generate additional revenue. We're not removing the tax in a static environment."

Burmaster said the county's sales tax receipts rose more than $2 million from 1998 to 1999, and the Granieri plan would cancel that out, at a time when the county projects that Gov. George E. Pataki's new state budget would cost it more than $2.4 million in lost aid and additional expenses.

Granieri insisted that additional sales of taxable items in Niagara County stores would result from repealing the clothing tax.

Commented Minority Leader John S. Tylec, D-North Tonawanda, "It sounds like Sam's betting on an if-come. I'd be hesitant to go out on a limb with that until we know where we stand on the tobacco settlement and the Health Care Reform Act."

The latter state law imposes an unfunded mandate on counties, requiring them to pay 25 percent of the cost of the new Family Health Plus program to cover health insurance for uninsured adults. Niagara County estimates a $2.3 million impact over the next three years.

In effect, that would cancel out the county's revenues from the 1998 settlement of the lawsuit against the major tobacco companies.

However, legislation was introduced in Albany Thursday to repeal the mandate and have the state pay the whole cost of Family Health Plus.

Urtel said, "If we get ourselves some leeway, we could consider (repealing the clothing tax) in a future year."

But for now, she said, "I certainly would prefer to hold onto that instead of having a property tax increase. If you have to go somewhere to get money, sales tax is the most equitable."

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