Whether the city of Schenectady could do better collecting its own sales tax than accepting a guaranteed $11.7 million from the county is anybody’s guess, and unfortunately that’s all it can be since no one knows how much of the $90 million the county will collect this year will come from sales in the city.
The deal the county gave the city, while slightly better than the old one, could have been better still, according to people like now-former budget analyst Jason Cuthbert and Councilmen Vince Riggi and Carl Erikson, because while sales tax collections have soared in the county over the past decade, the county has kept all of the extra money for itself.
Indeed, the county’s share has risen from $25 million in 1998 to $60 million this year, but for most of this time, the city has had to make do with the same $11 million. County officials insist they have no extra money to spare, so perhaps it’s not unreasonable to ask, where has all the money been going?
We suspect the answer has something to do with the county nursing home, which every year requires huge taxpayer subsidies. This year, for example, it will cost nearly $8 million to cover the nursing home’s operating losses.
The new nursing home currently under construction could lose less if it attracts more private, paying customers (rather than those on Medicaid), but given how health care inflation almost always outstrips the general inflation rate, that seems unlikely. And the county will also be responsible for 15 percent of the new $44 million facility’s debt service — probably for the next 30 years.
While it’s true that the county’s Medicaid costs and other mandates rose $75 million over the same period — Medicaid alone went from $9 million to $34 million — the big difference is that the nursing home isn’t necessary, but an optional service. And if the county wasn’t committed to providing it, it might have more to go around not just for Schenectady but the county’s towns. As Cuthbert pointed out before he was canned the other day, Albany County’s take from its sales tax is just 60 percent, so maybe it’s not unreasonable to ask why Schenectady County’s, at 67 percent, has to be so high.
It’s something for taxpayers to think about as the City Council contemplates which Draconian budget cuts to make to close a deficit as large as $5 million.