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'05 sales tax receipts fall below target

Rising utility costs, a subway strike and a dose of Albany follies are being blamed for Niagara County's 2005 sales tax receipts dipping below the target set in the county budget.

Although overall sales tax receipts rose in the county for 2005, the county's share fell from the 2004 figure.

In all, $93.2 million in sales taxes were collected in the county last year, with the county keeping $48.2 million. The remainder was split up among the cities, towns and villages, after the county took 1.6 percent off the top of the municipal shares to fund the enhanced 911 emergency telephone system.

The 8 percent sales tax in Niagara County consists of 4 percent imposed by the state, 3 percent by the county for general purposes and 1 percent by the county and reserved to be spent on Medicaid, a state mandate that is the largest item in the county budget.

County Treasurer David S. Broderick said last week that one reason the county's share declined by 1 percent from the 2004 figure was because of the increases in utility bills. The localities pre-empt the sales taxes on utility bills, as well as on hotel bills, restaurant tabs and amusement tickets, meaning they split up all those taxes, and the county receives nothing.

Sales taxes collected on consumer utility bills rose by 11 percent in 2005, as natural gas prices spiked. The hotel and restaurant taxes rose slightly, while admission taxes actually fell.

The county keeps 47 percent of the 3 percent general sales tax for itself, but it keeps all of the money from the extra 1 percent. The "Medicaid penny," as some legislators prefer to call it, raised $23.2 million last year. The county kept $25 million from the general sales tax.

However, the county's 2005 budget estimated revenue of $27 million from the general sales tax and $22.5 million from the Medicaid tax. The total take of $48.2 million undershot the total budget estimate by $1.3 million.

But Broderick told the County Legislature's Administration Committee that there were extenuating circumstances, all of which he blamed on foul-ups in Albany.

In the first quarter of last year, the state withheld $557,000 in sales tax money that should have gone to Niagara County to make up for a 2003 error in which Niagara was overpaid.

Broderick said that was because someone in Albany goofed in 2003 and sent some money to Niagara County that should have gone to Nassau County and New York City, which are right above Niagara on the alphabetical list of counties.

The second problem was caused by the three-day New York City train and subway strike in December.

Broderick said he was told by the state Department of Taxation and Finance that because of the strike, not all the sales tax deposits made it to the state's bank in Brooklyn on time. They are not sent electronically.

The result was that Niagara County did not receive as much money as it should have from the Christmas shopping rush; December's collections were $1.1 million lower than in 2004. The state is making up that delayed money this year, Broderick said, but it does not help the 2005 books.

Majority Leader Malcolm A. Needler, R-North Tonawanda, had a hard time believing the strike explanation. "It seems funny that a three-day lag should take them six months to make up," he said.

Legislator John Syracuse, R-Newfane, said the problem means the county did not do such a bad job in forecasting sales tax revenue. "I think it's important that we forecast sales tax revenues pretty close," he said.

e-mail: tprohaska@buffnews.com

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