OGDENSBURG — City officials said Friday they were disappointed to learn that home rule legislation pending in the state Legislature that would have allowed the city to collect an additional 1% of sales tax failed to pass before the end of session Thursday.
With the legislation failing to pass, city officials said they expect roughly $1.5 million less in revenue than they hoped.
“Sales Tax Revenue is a critical component for any community, and that is especially true for rural northern New York communities,” City Manager Stephen P. Jellie said in an email Friday afternoon. “The absence of this additional 1% sales tax to be collected in the City of Ogdensburg, in lieu of the 1% sales tax collected by St. Lawrence County within the city limits Ogdensburg is funding needed to maintain vital life saving and life sustaining services.
“Without it,” he added, “significant reductions in personnel and services will occur in 2022.”
New York is a home rule state. In some U.S. states, known as home rule states, the state constitution grants municipalities or counties the ability to pass laws to self-govern “as they see fit.” In this case, the city asked the Legislature to grant it the authority to collect an additional 1% of sales tax within the city limits rather than St. Lawrence County collecting the tax.
But since the legislation failed, the county will continue to collect that 1% of sales tax.
Two bills were pending in committees — an Assembly bill in the Ways and Means Committee and a Senate version of the same bill in the Finance Committee, according to Assemblyman Mark C. Walczyk, R-Watertown. Both bills, if passed, would have authorized the city to impose up to an additional 1% of sales tax. Gov. Andrew M. Cuomo would then have had to sign the legislation into law.
The Senate version of the bill passed after a big push from Sen. Patricia A. Ritchie, R-Heuvelton, but no action was taken on the Assembly version of the bill. It remained in the Ways and Means Committee and was not brought to the floor for a vote before the scheduled end of the legislative session Thursday.
“While I’m disappointed the bill wasn’t brought to the floor, I’m at the ready to work with both city and county officials to try to move the ball forward on this issue,” Mr. Walczyk said Friday. “The long-term viability of Ogdensburg — the only city on the St. Lawrence — is crucial to the overall economic health of our region.”
The legislation was introduced on the heels of stalled talks between city and county officials about the city collecting its own sales tax. The city and county had been going back and forth for nearly two years before the county Board of Legislators ultimately shot down city officials earlier this year as they were seeking an extension of the current formula to further examine long-term options, including pre-empting.
Since the county declined to extend its agreement with the city, Ogdensburg has until November to pre-empt.
Ogdensburg is the only city in St. Lawrence County and is therefore the only municipality with state-granted authority to negotiate the sales tax distribution formula with the county.
The minimum sales tax rate in New York is 7% — 4% goes to the state while the other 3% goes to the local government. Counties can collect additional sales tax revenue, but not without authorization from the Legislature. In August 2013, St. Lawrence County requested and was granted approval from the Legislature to collect an additional 1% in the county. The county’s sales tax rate has been 8% ever since.
The current sales tax formula calls for Ogdensburg to collect 6.44% of the final 1% of sales tax St. Lawrence County collects. The county takes 83.56% of that final 1%, while towns and villages get the final 10%. This is the agreement the county failed to extend earlier this year as the board was attempting to have Ogdensburg transition to collecting the same amount of sales tax as the towns and villages, which is based on property value and population.
The pre-empting process will allow the city to collect 1.5% of the local 3% sales tax that is normally collected by the county.
The home rule legislation would have given the city the ability to collect up to 1% of additional sales tax within the city limits — an authority currently held by St. Lawrence County.
Regardless of the legislation failing to pass in the Assembly, Mr. Jellie said, the city will still move forward with the pre-empting process.
But if the legislation passed, the city would have been able to collect as much as 2.5% in sales tax within the city limits — 1.5% from pre-empting and 1% of additional sales tax.
“Ogdensburg Mayor Jeffrey M. Skelly and City Council are greatly appreciative of the support and effort from State Senator Patricia Ritchie and her staff in obtaining approval from the NYS Senate,” Mr. Jellie wrote. “The city is also grateful for the efforts of Assemblyman Mark Walczyk and his staff for efforts to bring this bill to a vote under very difficult political conditions. Ogdensburg looks forward to working closely with both offices to bring this bill to a vote should the state legislature return to Albany for a special session.”
Typically, when a bill does not move beyond a committee, it means the bill is dead for the year — unless the Legislature reconvenes. Legislative leaders can call lawmakers back into session at any time, but they are not required to do this. Lawmakers have suggested they will return before the end of the year to pass pending legislation, but that remains unknown.
“The City of Ogdensburg calls on the NYS Assembly to act decisively in the interest of saving the only city in St. Lawrence County and to put aside the partisan political interests that are creating a perilous divide in Albany,” Mr. Jellie wrote. “The request to grant the City of Ogdensburg is not a Republican or Democratic issue, it is purely an issue of allowing the citizens of Ogdensburg the ability to govern themselves.”
The Legislature is scheduled to reconvene in January 2022.