Saratoga Springs

Saratoga Springs’ year-over-year increase in sales tax collection highest in state

People walk in and out of businesses on Broadway in Saratoga Springs on Tuesday, March 8, 2022.

People walk in and out of businesses on Broadway in Saratoga Springs on Tuesday, March 8, 2022.

SARATOGA SPRINGS — The Spa City set the standard in New York for a one-year percentage increase in sales tax collection, racking in nearly $15 million in 2021.

It’s the highest total the city’s ever captured in a year, Commissioner Minita Sanghvi said Tuesday.

This occurred without a full year of tourism, said Sanghvi, who attributed the spending to pent up demand for shopping and eating out during the pandemic.

Moreover, the city’s 32.5% increase in sales taxes collected in 2021 compared to 2020 was the strongest year-over-year increase in the state, New York State Comptroller Thomas P. DiNapoli reported.

“We are excited,” Sanghvi said. “It’s very promising for 2022 and we’re hoping that the trend continues. We will do all in our power to help continue that trend.”

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In total, the city collected $14,988,072 in sales tax in 2021, exceeding projections by more than 51%, the commissioner said. This amount surpassed sales tax collections from 2019, the year prior to the pandemic, by 11.5%, Sanghvi said.

Statewide, DiNapoli recently reported that local government sales tax collections totaled $19.6 billion in New York, an increase of more than 19%, or $3.1 billion, in 2021 compared to 2020.

It was New York’s highest annual increase on record after a historic low in 2020, when local sales tax collections declined by 10%, DiNapoli said. Annual growth in 2019 was 4.7%.

“The pandemic substantially changed consumer spending for goods and services and from brick and mortar to online,” DiNapoli said in a statement. “While local sales tax collections were robust in 2021 as the economy rebounded from the pandemic, some of that growth is attributed to inflation, which was the highest it has been in over thirty years. If inflation remains high, consumer spending on many taxable goods could decrease due to the rising cost of basic staples.”

Sanghvi said the sales tax collection assures that the city will have a balanced budget, which is important considering the city’s occupancy tax collection was a bit lower than original estimates.

“It really shows a good positive trend for 2022,” she said. “In fact, our January numbers for 2022 are also record-breaking for the first month.”

Although numbers aren’t final, Sanghvi said the city collected about $759,000 in sales tax during January 2022, which would be the city’s best January ever.

Previously, the best ever January in sales tax collection was 2020, when it collected $663,000, while $519,000 was collected in 2021, she said.

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The numbers indicate people are coming out to patronize city businesses, Sanghvi said.

“They’re coming out and shopping. They’re coming out to the restaurants. It’s all good news. And if we get a good 2022 season, we should expect another record-breaking year of sales tax collections,” she said.

City Center Executive Director Ryan McMahon said in an e-mail that the report reflects the attraction of Saratoga Springs as a regional, and larger, tourism destination.
“With large gatherings not possible or practical for the bulk of the year we really were buoyed by more leisure travel.  It is a testament to the strength of our city.”
McMahon said the City Center, starting a week or so ago, was getting back to its more regular level of activity.  With the return of more group business and conventions this year should be as strong as last, he said.

Saratoga County Chamber of Commerce President Todd Shimkus noted that both Saratoga Springs and Saratoga County did better in sales tax collections in 2021 than they did in both 2020 and 2019.

“We had a nice run of spending in 2021,” Shimkus said, adding local residents, businesses and tourists contributed to the city’s success.

Shimkus urged the local community to keep it going.

“We feel like we created a movement with our ‘Save Our Locals’ campaign that really got everybody to think about doing just that,” he said. “Attention spans are short. We’ve got to make sure people still do that. It’s what makes us unique here, is having local stores and restaurants that are locally owned.” 

Money that the federal government pumped into households with stimulus aid, and the fact that most people weren’t able to travel great distances were also factors that contributed to the city’s success, Shimkus speculated.

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“You talk to local banks, and they’ll tell you that their local deposits have never been higher,” he said. “So people had money to spend. Once the (pandemic) restrictions were removed, it was like the Roaring ’20s around here. People just wanted to get out and and have some fun and spend some money and get together with people.”

According to Shimkus, a cross reference of city businesses experienced successes last year:

The Saratoga Arms Hotel, which was forced to shut down for six weeks after the pandemic hit, had massive cancellations in 2020 when fans couldn’t go to the racecourse. Circumstances changed in 2021, when the hotel could charge rates that were significant, to make up for losses from the prior year.

Scallions, which is owned by a husband and wife team, had loyal patrons prepaid for meals that they would consume at a later date “just to make sure they had money and stayed open.”

On the retail side, Impressions made a strong comeback by offering “porch packages” to customers. The packages contained themed items – such as for chocolate lovers, grillers, and golfers.

Contact reporter Brian Lee at [email protected] or 518-419-9766.

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