Schenectady County saw its sales tax revenue grow 8.3 percent in the first six months of this year, the best performance of any county in the Capital Region, according to a report released Tuesday by state Comptroller Thomas P. DiNapoli.
The county took in nearly $50.5 million in the first six months of the year, compared to $46.6 million in the same period a year ago, according to the report.
The size of the increase came as a surprise, and it may be due to the amount of development and redevelopment occurring in Schenectady County and in the city of Schenectady, county spokesman Joe McQueen said.
“We think a lot of that is one-time stuff that we will receive [from construction activity], but it’s still great,” he said.
McQueen said it’s too early to say whether strong sales tax performance in the first half of the year will allow a county property tax cut or freeze when the 2018 county budget is developed in the next couple of months.
“This is one piece of a lot of factors that are considered when we look at the budget as a whole,” he said. “As we get into the fall, that is something the Legislature will have to look at.”
But Legislative Minority Leader James Buhrmaster, one of two Republicans on the 15-member Legislature, said a tax cut should at least be discussed.
“All the investment we’ve been talking about in this community, we’re doing it to try to drive the property tax down,” Buhrmaster said. “We need to invest back in the community but we have to give something back to the residents and to businesses, the people who are paying the taxes.”
The 2017 county budget anticipates the county receiving $94.5 million in sales tax revenue for the entire year, so it’s possible that total will be exceeded by the end of the year.
The agreement for how sales tax revenue is distributed among the county, city, towns and villages is also due for renegotiation in the next few months, and town leaders in the county often say they receive too little.
“This basically illustrates how the local property taxpayer is left behind despite all the development in the county,” Glenville Town Supervisor Chris Koetzle said. “The vast majority of the money goes to the county and the city of Schenectady and the taxpayers in the towns are left holding the bag.”
The average growth rate statewide during the period was 3.3 percent, according to the comptroller’s report. In the Capital Region, only Albany County saw its sales tax revenue decline from a year ago. Albany was one of just three upstate counties to see a drop in its sales tax revenue, a situation DiNapoli said may be due to big-box retail expansions in surrounding counties reducing retail traffic in the county. The county’s revenue dropped 1.5 percent, to $125.2 million.
“Local sales tax growth across the state is welcome news, especially for many of our upstate communities that have struggled with tough economic conditions,” DiNapoli said. “Sales tax, however, can be a volatile source of revenue and local officials must remain cautious.”
In general, the first half of the year brings in less money than the second half of the year, which includes back-to-school shopping, holiday shopping and, in this area, the tourism spending that occurs around the Saratoga horse racing meet.
In Schenectady, it’s unclear whether the opening of Rivers Casino & Resort in February was a factor. The gaming activity isn’t subject to sales tax but restaurant and merchandise purchases at the casino would be.
The state doesn’t provide enough information to determine whether a specific development contributed to sales tax through building materials or furnishings purchases, McQueen said. “You do have the entire Mohawk Harbor, a lot of that material is taxable,” he said.
Mohawk Harbor, where the casino is located, is a large residential and commercial development that remains under construction.
Schenectady County froze property taxes last year. McQueen said that wasn’t due to initial casino payments, since those payments were used to reduce the county’s debt.
“With all the development, it will hopefully lead to a more consistent increase in sales tax in the future,” McQueen said.
“I would hope that with seeing that kind of good information, let’s look at the best way to distribute back fairly to all concerned, the residents and the businesses who pay property taxes,” Buhrmaster said. “This is good news, and we ought to capitalize on it and find a way to help everybody.”
Among cities that collect their sales tax separately, Saratoga Springs saw its revenue drop 5.9 percent, but DiNapoli said that was largely due to a technical adjustment in the second quarter. Gloversville took in $1.7 million, up 4.4 percent; Johnstown took in $1.8 million, or 0.4 percent more than last year.
Other local counties:
- Fulton took in $9.9 million, up 2.4 percent.
- Montgomery County took in $14.3 million, up 6.5 percent.
- Saratoga took in $56.7 million, up 1.8 percent.
- Schoharie took in $7.1 million, up 5.5 percent.