OGDENSBURG — Despite a rapidly approaching deadline, the city is moving full speed ahead with a plan to collect its own sales tax.
The St. Lawrence County Board of Legislators’ Finance Committee shot down a resolution Monday night that would have again extended the city’s and county’s agreement on how sales tax collected in the county is distributed. The agreement has been in place since 2011 and, if the extension was approved, would have expired on Nov. 30, 2023.
With the resolution failing Monday, 8-7, the city has until November of this year to finalize its negotiations with the county about how sales tax is distributed to the city.
“It’s so disappointing that they’re taking this hard-line stance,” City Manager Stephen P. Jellie said Tuesday of the Finance Committee’s move to strike down the extension.
Under the proposed resolution, beginning on Dec. 1, 2023, the city would have its 6.64% share of sales tax lumped in with that of other municipalities and would be subject to the same formula in place to distribute sales tax based on population and assessed value.
The city is seeking to pre-empt, which would allow the city to collect its own sales tax instead of sales tax being collected on the county level, then being distributed to the city.
According to Mr. Jellie, the city was given a list from the state of about 20,000 businesses across the county, and the city was asked to identify ones that fall within the city limits in order to be able to collect its own sales tax.
There is currently no further breakdown of sales tax dollars than the county level, as the state, for the most part, collects taxes by county. The exception would be in counties where cities already pre-empt taxes. Right now, the sales tax goes to the state simply as money from St. Lawrence County.
“The example I like to give is Walmart,” St. Lawrence County Treasurer Renee M. Cole previously said.
The sales tax paid for a waffle iron bought in Walmart in Ogdensburg goes to the state as a tax paid at Walmart in St. Lawrence County. It could have come from any one of the big retailer’s three stores in the county — Potsdam, Massena or Ogdensburg. Walmart does not pay three state sales tax bills; it pays one, she said.
The city’s work to pre-empt won’t stop because the extension was shot down, Mr. Jellie and Mayor Jeffrey M. Skelly both said Tuesday.
“The city has to now prepare to accept the county’s formula, or pose some kind of a legal challenge that we’re not being negotiated with in good faith,” Mr. Jellie said.
Mr. Jellie said the extension would have allowed the city another two years to work on its pre-empt setup. Nine months to do so is “not a lot of time,” he added.
It will also be a feat to get the state set up on “such a short notice,” he said.
Mr. Jellie said he’ll be working on two fronts now: working to get the city set up for pre-empt sales tax collection, as well as working with Mayor Skelly to push for a change in a long-standing rule that currently has the city paying the county and the Ogdensburg City School District for delinquent property taxes.
The city, which is currently grappling with severe financial hardship only exacerbated by the ongoing COVID-19 pandemic, including an $825,000 debt in unpaid delinquent property taxes to the county, has pushed the county for larger shares of sales tax revenue.
The rule, known as the “property tax foreclosure authority rule,” requires the city to pay the county and city school district each year as compensation for private property owners who fail to pay their local land taxes.
“The city has every intention of paying what the county is owed,” Mayor Skelly said. “We’re a proud city, we pay our bills.”
For 2020, Mr. Jellie confirmed the city paid the county about $336,000 in delinquent property taxes.
Times reporter Vaughn Golden and St. Lawrence County Editor Tom Graser contributed to this report.