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March 16, 2012

 

City sales tax offer would up its take

Proposed 10-year deal at odds with county desire to get bigger share of sales tax revenue

By MATTHEW NOJIRI
Staff Reporter
mnojiri@cortlandstandardnews.net

The city of Cortland has put its first offer on the table as it begins sales tax negotiations with the county, a process that determines how more than $26 million in annual revenue will be split.
Mayor Brian Tobin said the city has provided the county with a 10-year deal that recognizes the city for housing nearly 40 percent of county residents and most of the local nonprofit service agencies. It also rewards municipalities like Cortlandville that host many of the area’s retailers.
Under the current deal, negotiated in 2006, the county receives 52 percent of the sales tax; the city gets 18.24 percent; and towns and villages split 29.76 percent.
The city proposal would raise the city share to 18.68 percent over the life of the agreement while the amounts for the county, towns and villages would vary.
Tobin said the offer fairly distributes the sales tax and considers “who is spending the money” driving sales tax revenue and “where the money is being spent.”
“We think this is the middle point,” Tobin said, adding the city plan considers “what we think is good, not just for the city and county but for the towns and villages.”
County officials are not commenting specifically on the city plan but said Thursday that they will want a larger portion of the sales tax.
The county is facing its own financial challenges as it is reaching the constitutional limit it can ask residents to pay in property taxes. The county will look to sales tax to decrease the property tax burden.
“It’s a rare revenue stream, and we’re all after the same dollars,” County Administrator Martin Murphy said during a presentation Thursday.
The county also must address other costs, including the local landfill and recycling center and an approximately $14 million emergency communications network upgrade.
The city’s proposal distributes the sales tax based on three factors. The county would continue to receive about 52 percent of the sales tax depending on projected growth or decline in sales tax. The city would get a slight raise based on a 2.5 percent population increase in the 2010 census. The towns and villages would receive their shares based on the total assessed property value.
The city received $4.8 million in sales tax last year. The county received $13.7 million and the towns and villages split the remaining $8 million.
Tobin said the city is proposing a 10-year deal to get a better view of its long-term revenue.
Tobin said the county and city will get together in the next few weeks to discuss the proposal. Tobin, Aldermen John Bennett (D-4th Ward) and Dan Quail (R- 5th Ward) and Director of Administration and Finance Mack Cook will represent the city in the negotiations.
County Legislature Chair Mike Park (R-Homer) said during a Legislature meeting Thursday that the county will need to create its own sales tax negotiating group.
Tobin said most of the nonprofit service providers reside in the city and provide benefits to all county residents. He cited SUNY Cortland and Cortland Regional Medical Center as examples.
All the towns and villages except Freetown, Harford, Preble, Scott, Virgil and Willet would see an increase in sales tax dollars based on the city plan.
Preble and Scott would lose the most in the first year of the deal — $23,949 and $23,214 in sales tax dollars, respectively.
The current six-year agreement expires at the end of the year.
Tobin said he wants to see the sales tax deal completed by the time many municipalities begin crafting their budgets in the fall.
“You want to be able to project what the revenue is going to be,” Tobin said. “Getting it done in a timely manner is important.”

 

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