OGDENSBURG — City Council voted Monday to enter into a year-long extension of the current sales tax distribution agreement with St. Lawrence County.
Sales tax in St. Lawrence County is 8 percent. The negotiations thus far have been over the city’s share of the last 1 percent of the tax. The city receives 6.44 percent of the extra 1 percent, while the remaining towns and villages split 10 percent. The county retains 83.6 percent of the extra 1 percent. The city receives about $900,000 annually as its share.
“It is a very, very big issue for everyone in the county,” Mayor Jeffery M. Skelly said Monday night. “These negotiations are going to affect 110,000 people. Every community relies on the sales tax for approximately 25 percent of their budget.”
On Wednesday, Mr. Skelly provided the Times with a proposal calling for a major reshaping in how sales tax is distributed.
Currently, of the seven cents that constitutes the rest of the tax, the state gets four cents. Of the remaining three cents, 50 percent goes to the county. The city, towns and villages split the last 50 percent, with 6.44 percent going to the city, towns and villages receiving 43.56 percent.
Mr. Skelly proposes the 4 cents left after the state takes its cut be treated as a whole with the county getting 48 percent and the city, towns and villages getting 52 percent.
Of their share, the city would get 7 percent while the towns and villages would split the last 45 percent.
If this formula was in place in 2019, the towns’ and villages’ shares would have gone from $21.2 million to $27.2 million. The city would increase from $3.8 million to approximately $4.2 million. The county’s share would drop from $35.3 million to $29.1 million, according to Mr. Skelly.
“I appreciate them (St. Lawrence County) giving us the opportunity of this year extension to resolve and negotiate in good faith with them,” Mr. Skelly said Monday night.
St. Lawrence County Board of Legislators Chairman Joseph R. Lightfoot, R-Ogdensburg, said he would not comment on Mr. Skelly’s proposal.
“I don’t want to comment directly on it because we are going to be negotiating with the very people that authored what I saw,” Mr. Lightfoot said of Mr. Skelly’s written proposal.
Negotiations began before Mr. Skelly took office but have been stalled mainly due to the ongoing coronavirus pandemic.
Mr. Skelly’s written proposal and an interview Mr. Lightfoot had with the Times on Thursday show neither have moved far from their positions on display at a heated March 9 City Council meeting during which Mr. Skelly accused the county of building a large contingency fund on the backs of city residents, and Mr. Lightfoot said he would not negotiate publicly.
Still, Mr. Lightfoot said the proposal from Mr. Skelly was something.
“Up until this point, since we started this negotiation process, the city of Ogdensburg has brought nothing — nothing — to the table,” Mr. Lightfoot said.
Mr. Skelly said the county is collecting more money than it needs. The county currently has a fund balance of $31 million, with projections hitting as much as $40 million in the coming year, according to some officials in the county, Mr. Skelly wrote in his proposal.
“Relying on property tax to generate government revenue is simply no longer sustainable and has the reverse effect of stifling economic growth,” he said.
Mr. Lightfoot said the fund balance is the proper amount in relation to the county’s budget and the county had built its fund balance through job cuts, consolidation and fiscal prudence.
“In 2014 we had, actually, a negative fund balance to the tune of, in excess of $300,000,” Mr. Lightfoot said. “Because of the persistence and dedication by county employees, county department heads, the Board of Legislators, the county administrator, the county attorney; we were able to turn that negative number around to where it is today.”
Mr. Skelly said that by giving a larger portion of sales tax to the city and other municipalities, they will be able to encourage growth.
“If area municipalities receive a larger share of sales tax revenue — money already due them — they will have an opportunity to lower property taxes and encourage growth through PILOT programs and other incentives for area businesses. Doing so, in conjunction with lowering their own expenses, can breathe new life into this portion of the north country economy,” Mr. Skelly wrote.
Mr. Lightfoot said a new negotiation session is in the process of being arranged.
“I would caution the city, that if they want to negotiate it is going to be in a session,” Mr. Lightfoot said. “It is not going to be in a newspaper. If it is, we can end the negotiation right off.”