SCHENECTADY COUNTY — The Schenectady County Legislature approved the new sales tax distribution agreement with the city of Schenectady at a special meeting Monday, the final step in approval of the eight-year deal announced last month.
The agreement, which goes into effect when the current agreement expires on Nov. 30, includes a guarantee of more money for the city each year, and also guarantees the county’s towns and villages at least what they receive now, with increases promised in the later years of the agreement.
There has been no controversy about the deal, which has even pleased town officials who have long complained they they don’t receive a fair share of the sales tax revenue. The county is making the guarantees despite how the pandemic’s impact on the economy has undermined revenues tax revenue this year.
“Schenectady County’s responsible fiscal planning allows us to continue supporting our local municipalities at pre-pandemic levels even while revenues have decreased,” said Anthony Jasenski, D-Rotterdam, chairman of County Legislature. “While we don’t know what the future holds, our towns’ sales tax revenue will remain stable during the first three years of the agreement, and can increase after that.”
The sales tax is one of the largest sources of revenue, if not the largest, for local governments. In 2019, more than $105 million in sales tax revenue was collected in Schenectady County, according to the state Comptroller’s Office — but that is expected to be off by 10 percent or more this year.
Negotiations on the new agreement took place entirely between the county and city. The city has a legal right to receive close to half of the sales tax generated within the city because it already had a 3 percent sales tax in place before the county established its countywide sales tax in 1988.
The county sales tax is now 4 percent, with one-half percent of that money divvied up between Schenectady County Metroplex Development Authority (which gets 70 percent) and the county’s towns and villages (which get 30 percent.) This is in addition to the other sales tax payments towns and villages get from the county under the new agreement.
The city will continue to receive the same percentage of total sales tax as it does now, but an annual payment from the county to the city for services provided to the county will increase from $630,000 each year to $1 million.
The agreement also spells out services the county will provide to the city and towns, including central emergency dispatching, a countywide hazardous materials response team, a centralized vehicle repair facility, sponsorship of a solar energy consortium, intermunicipal street crimes and drug crimes task forces, the county library system, and an $18 million police and fire radio system upgrade.