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The Times
  • Herkimer County revisits income tax revenue sharing

  • One Herkimer County legislator wants to reinstate $600,000 of sales-tax revenue previously split among local municipalities.

    “We seriously have to consider giving municipalities back (the money),” said Legislator Gary Hartman, D - Herkimer. “They provide all the services to keep the businesses going.”

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  • One Herkimer County legislator wants to reinstate $600,000 of sales-tax revenue previously split among local municipalities.
    “We seriously have to consider giving municipalities back (the money),” said Legislator Gary Hartman, D - Herkimer. “They provide all the services to keep the businesses going.”
    County Administrator James Wallace said the fixed $600,000 figure was taken away in 2006 to cover rising costs of Medicaid.
    “Officially, we’ve never had the discussion (to reinstate the $600,000),” he said.
    With the current 4.25 percent county sales tax, three percent is shared among the county and the municipalities, including the city of Little Falls, Wallace said. That three percent is projected to be about $28.7 million, of which about $8.5 million is shared with the municipalities, he said. The one percent, from which the fixed $600,000 was distributed, is about $6.4 million.
    The remaining .25 percent is used exclusively for construction of a new jail, a charge that was implemented in December 2007.
    Legislator Robert Hyde, R - German Flatts, agreed with Hartman during a recent meeting that the sale tax distribution should be discussed, suggesting that it be phased in slowly. He said last week he wanted to hear the arguments for and against the reinstatement.
    Distributing revenue
    Every county is unique in how sales tax is distributed, said Mark LaVigne, spokesman for the New York State Association of Counties.
    “Since the property tax cap and the recession, a number of counties have considered or reconsidered their sales tax distribution formula,” he said.
    Late last year, Oneida County Executive Anthony Picente suggested changing the sales tax formula in his county as part of a larger effort to examine how to sustain revenue to maintain the demands of mandates and services.
    Oneida County collected about $140.4 million in 2011 sales tax and kept about $89 million of it.
    LaVigne said there are 13 counties that do not share sales tax at all, including Lewis County.
    Lewis County Manager Dave Pendergast said he believes the county always has kept all the sales tax, and instead provides services for the municipality, in lieu of the revenue.
    Lewis County’s sales tax share is 3.75 percent and is used to offset final figures for the budget and tax levy, Pendergast said.
    “Ours stays very flat,” he said. “People are buying for necessity, not for new things.”
    Sharing the one percent
    Herkimer County Legislator Dennis Korce, R - Mohawk, said townships were told the one percent would be provided, as long as the county could afford it.
    “The reason we passed it was to keep Medicaid from affecting our property taxes,” he said.
    Frankfort Town Supervisor Joseph Kinney said, however, the loss of sales tax revenue means one of two things: cuts in services or an increase in property taxes.
    Page 2 of 2 - Frankfort’s Highway Department has been the target of the cuts, reducing the fund for road paving from about $245,000 to $200,000, he said.
    “We’ve elected, at least temporarily, to reduce the amount of paving,” he said. “Since that elimination, we’ve been unable to keep up with our annual paving requirements.”
    Korce said the loss of that revenue for the county would be a hardship as well.
    “If we go back to giving it to the towns, then we have to make it up,” he said. “I’m sure there will be discussion.”
    Korce said the one percent sales tax was added in order to stabilize property taxes, not provide revenue for the towns.
    So, when it comes to it being reinstated, the chances are slim.
    “Not until Medicaid goes away,” Korce said.
    And if that happened, he said the county probably would eliminate the one percent sales tax.
    Kinney said he recognizes the county will keep its share, but the municipalities should have their fair share as well.
    “We felt that losing that share of the 1 percent was a hardship for all the area towns and villages,” he said. “It’s not the county government generating the sales tax revenue, it’s the public at large, with each town and village resident in their boundaries participating in the generation.”
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