Strong sales tax figures are one of the few things keeping Herkimer County from having to borrow money to offset millions of dollars in missing reimbursement from the state, according to county officials.
Sales tax returns for the first two quarters of the year are up a combined almost $273,000 from the prior year.
The July distribution for the second quarter accounted for close to $200,000 of that increase, jumping to $4,724,019.
Despite the increases only showing improvement from last year’s major shortfalls, $620,000 less than in 2008, county Treasurer Kimberly Enea feels it is still helping stave off unwanted borrowing.
The late budget in Albany has meant Herkimer County is waiting for $8.2 million in reimbursement from the state, according to Enea. “That’s big” as far as the impact on a county budget of close to $90 million, she said.
Unexpected positive impacts on the county budget allow the legislature to hold off on borrowing money to avoid an impact on county services and payrolls.
“These sales tax increases really help bridge the gap,” Enea said.
Oneida County officials recently announced they would withhold Medicaid payments to the state due to late reimbursement payments. Faced with its own unpaid bills, the county decided it would spend the hundreds of thousands of dollars to keep its own budget moving.
Many counties are faced with this decision to either borrow money, which carries interest, or withhold payments to the state in order to keep paying bills.
But since the state budget could be passed at any time, freeing up the reimbursement payments, counties look at borrowing as the last option, according to Enea.
Even if the state budget passes shortly after a bond is approved, the county would still have to pay minimum interest costs on any borrowing, she said.
Enea was unable to say when the county would have to borrow money to avoid an impact on services and payroll.
While savings in the budget have given the county some room, according to Enea, the sales tax collections — which she attributed to travel, tourism and annual festivals — provided the unexpected padding.
“We definitely needed the shot in the arm,” Enea said. “So far, we’re still O.K.”
Herkimer, N.Y. —
