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Editorial: Sales tax deal seems fair enough to city

Editorial: Sales tax deal seems fair enough to city

City should take '$11.7 million in the hand'

While it’s possible that the city of Schenectady could get a better deal from the county over sales tax revenue sharing by threatening to go it alone with a so-called pre-emptive tax, the deal the county has offered — and that Mayor Gary McCarthy and a majority of council members seem to support — isn’t too shabby.

It would not only provide the city $500,000 — roughly 5 percent — more per year than the $11 million it now gets, it would also furnish $100,000 annually in money the city desperately needs to demolish derelict buildings and another $100,000 (total) to start its land bank. The deal would also allow the city to share the services of the county’s purchasing department and its labor contract negotiator, areas that should save the city tens of thousands of dollars.

Finally, the deal has a formula that would allow the city to reap part of the benefits from sales tax growth (collections have jumped 10 percent over the last two years): Its take would increase at the same rate that sales tax revenue does.

Is the arrangement the best the city might squeeze out of the county if it threatened to break from the county and rely completely on its own sales? Maybe yes, maybe no. The problem, as Councilwoman Leesa Perazzo points out, is the city doesn’t know what portion of the county’s total sales tax take comes from the city. Obviously, the city has the largest population, but the retail presence it once had is lacking; many stores have moved to malls and such in Rotterdam, Niskayuna and Glenville. And city residents aren’t as affluent as their suburban counterparts.

So breaking away would be a gamble. Saratoga Springs tried it a number of years ago and came up short initially. Collections have since rebounded, but Schenectady is no Saratoga Springs.

With its latest offer, the county has improved its stance on this issue; before now, it didn’t give the city a share of any revenue growth during the course of an agreement. Now that it has an adjustment built in, it’s got some protection. Still, it seems that the arrangement period — eight years — is needlessly long. Why not renew every four years to account for any trends or wrinkles that might emerge?

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