CANTON — One of the sales tax proposals being looked at by St. Lawrence County officials would mean a loss of roughly $938,000 in revenue to the city of Ogdensburg, with the county’s 32 towns and 11 villages also facing reductions.
Eight different options for revising how sales tax is doled out to municipalities are being explored by an ad-hoc sales tax committee that is working to hammer out a new sales tax agreement with the city of Ogdensburg to replace a 10-year agreement that expires Nov. 30, 2020.
Besides property taxes, sales tax revenue is one of the most significant pieces of funding that towns and villages rely on to cover expenses in their respective budgets.
Legislature Vice Chairman David Forsythe, R-Lisbon, is chairing the five-member sales tax committee that’s negotiating with city officials. Other committee members are Legislature Chairman Joseph R. Lightfoot, R-Ogdensburg, James E. Reagen, R-Ogdensburg, Daniel Fay, D-Canton and Kevin D. Acres, R-Madrid.
One of the options calls for the county to keep all of the revenue generated by the extra 1 percent sales tax that was implemented in 2013. In 2018, the county collected roughly $58 million in sales tax, with the extra 1 percent generating about $14.5 million.
“We’ve talked about doing away with the extra 1 percent for all the towns and the city,” Mr. Forsythe said. “That won’t be popular.”
Faced with deteriorating roads and bridges, rising Medicaid expenses, unfunded mandates and other expenses, some county lawmakers have argued that the county needs to retain a greater share of sales tax collections to help cover those expenses.
Different ways of accomplishing that are being explored. No decisions have been made, partly because the overall issue will be impacted by the agreement that’s reached between Ogdensburg and the county. “We have 600 miles of roads in St. Lawrence County we have to maintain. By the looks of it, we’re not doing that,” Mr. Forsythe said. “It’s hard to keep up. There’s no way we can stay on pace.”
The city of Ogdensburg receives 6.44 percent of revenue from the extra 1 percent, while the remaining towns and villages split 10 percent. The county retains 83.6 percent of the extra 1 percent.
Ogdensburg receives $938,302 from the extra 1 percent while all the remaining municipalities split about $1.35 million.
The county is required to negotiate an agreement with Ogdensburg because it’s a city. The other municipalities don’t have a say in how sales tax revenue collected by the county is distributed.
The county sales tax committee is scheduled to hold its second meeting with Ogdensburg officials Oct. 23. City Manager Sarah Purdy and City Comptroller Timothy Johnson represent the city on those discussions.
“I represent a part of Ogdensburg, but I also represent Lisbon, I represent St. Lawrence County,” Mr. Forsythe said.
Ms. Purdy said any reduction in sales tax revenues would be difficult for the city which is financially stretched.
“We’re already struggling and we don’t need to be kicked while we’re down,” she said.
A comprehensive financial review conducted by the state’s Financial Restructuring Board predicts that unless the city finds additional ways to reduce costs, it will reach its constitutional tax limit in 2023.
“The city is working very hard to delay that arrival. Taking away or reducing one or more of the main sources of revenue hastens when that day gets here,” Ms. Purdy said.
She said switching from a paid fire department to a volunteer fire department as some have suggested, would be a complex process that could jeopardize the safety of city residents. Firefighters have training that makes it capable to respond to rescue calls when volunteer rescue crews are responding to another call. Recruiting volunteers may not be easy, she said. “To think we can just flip over to a volunteer fire department is not realistic,” Ms. Purdy said.
Another option is for the county to use sales tax revenues to pay its $24 million Medicaid bill and then distribute whatever is left to the municipalities. Based on 2018, when the county collected about $58 million, that scenario would leave $34 million for towns and villages.
The county is also considering taking about $1,056,000 from its sales tax revenue and distributing that to municipalities to replace AIM money that the state eliminated.
State officials have said sales tax generated by internet sales should be enough to cover the reduction in AIM funding.
“The consensus is to make the townships whole by taking it right off the top of the sales tax,” Mr. Forsythe said. “At least that’s the consensus of the committee.”
Gouverneur Village Mayor Ronald McDougall said local officials across the county are concerned about losing sales tax revenue. He is president of the St. Lawrence County Mayor’s Association.
“We’re very concerned with any changes. There’s much going on about this,” he said.
Legislator James Reagen, R-Ogdensburg, said he’s opposed to changing the existing sales tax formula because it would likely be detrimental to the city, as well as the towns and villages.
“It seems like before any radical steps are taken we should look at the impact on these communities,” Mr. Reagen said.
Businesses, prisons, the port, and the hospital in Ogdensburg provide employment for many people in neighboring communities, he said.
BY THE NUMBERS
The following chart shows the total amount of sales tax revenue each municipality received in 2018. The second number shows how much they would lose if St. Lawrence County decides to keep all of the revenue generated by the extra 1 percent sales tax that was added in 2013:
*City of Ogdensburg: $938,302 of $3,783,417
*Town of Brasher: $29,941 of $421,228
* Town of Canton: $59,136 of $831,976
* Town of Clare: $4,924 of $69,274
* Town of Clifton: $33,166 of $466,600
* Town of Colton: $56,906 of $800,592
* Town of Dekalb: $28,853 of $405,921
* Town of Depeyster: $12,405 of $174,524
* Town of Edwards: $16,482 of $231,875
* Town of Fine: $31,881 of $448,532
*Town of Fowler: $34,995 of $492,339
*Town of Gouverneur: $35,882 of $504,814
*Town of Hammond: $33,282 of $468,232
*Town of Hermon: $18,496 of $260,214
*Town of Hopkinton: $22,352 of $314,462
*Town of Lawrence: $22,119 of $311,189
*Town of Lisbon: $56,577 of $795,969
*Town of Louisville: $38,871 of $546,867
*Town of Macomb: $18,452 of $259,596
*Town of Madrid: $23,195 of 4326,328
*Town of Massena: $42,086 of $592,102
*Town of Morristown: $32,577 of $458,324
*Town of Norfolk: $55,101 of $775,203
*Town of Oswegatchie: $54,287 of $763,750
*Town of Parishville: $42,182 of $593,451
*Town of Piercefield: $19,874 of $279,600
*Town of Pierrepont: $42,190 of $593,568
*Town of Pitcairn: $14,205 of $199,846
*Town of Potsdam: $75,968 of $1,068,780
*Town of Rossie: $12,794 of $179, 993
*Town of Russell: $24,756 of $348,289
*Town of Stockholm: $45,947 of $646,424
*Town of Waddington: $20,427 of $287,390
* Village of Canton: $67,552 of $950,380
*Village of Gouverneur: $44,169 of $621,399
*Village of Hammond: $3,141 of $44,190
*Village of Heuvelton: $8,482 of $119,333
*Village of Massena/Louisville: $7,349 of $103,386
*Village of Massena/Norfolk: $6 of $80
*Village of Morristown: $6,426 of $90,399
*Village of Norwood/Norfolk: $816 of $11,476
*Village of Norwood/Potsdam: $18,458 of $259,684
*Village of Potsdam: $96,003 of $1,350,645
*Village of Rensselaer Falls: $3,390 of $47,687
*Village of Richville: $3,445 of $48,472
*Village of Waddington: $14,741 of $207,386