Kingston Mayor Steve Noble said this week that the State Comptroller’s Office is now reviewing a sales tax revenue-sharing agreement between the city and Ulster County. If approved, the agreement would end the standoff over how to allocate some $109 million in annual sales tax receipts.
“My understanding from speaking with the county executive is that he’s shared those documents with the state comptroller and we’re just waiting for approval,” said Noble on Wednesday.
Noble’s remarks come more than two weeks after he and County Executive Mike Hein issued a joint press release to announce that they’d reached an “agreement in principle” to end the impasse. As of last week, Noble said, both parties were still negotiating “language” to be included in the new agreement.
At issue is the allocation of money from Ulster County’s 4 percent sales tax. Under the terms of a five-year agreement which expired on Feb. 29, the county received 85.5 percent of the total. The City of Kingston took in 11.5 percent. The remaining 3 percent was shared among Ulster County’s 20 towns based on assessed value. In January, as the agreement was set to expire, Republican leaders in the Ulster County Legislature suggested returning the revenue-sharing scheme to pre-1998 levels. That would have reduced Kingston’s share from 11.5 percent to 10 percent and the towns’ portion from 3 percent to 2 percent.
Legislator Richard Gerentine (R-Marlboro), chairman of the legislature’s Ways and Means committee, suggested the clawback was justified by the need to compensate the county for taking over Safety Net welfare costs previously borne by municipalities.
In response, Noble, joined by many town officials, called for the proportions to remain unchanged. Noble argued that altering the formula would cost the city about $1.6 million annually and make it nearly impossible to maintain essential services while complying with the state’s property tax caps. Noble added that any change in the formula would require careful planning and called for a new five-year agreement that would leave the previous revenue-sharing scheme unchanged. Hein, who never took a public stance on the revenue-sharing agreement nevertheless criticized Kingston for, he alleged, failing to pass on savings from the county’s assumption of Safety Net costs to taxpayers and accused the city of not doing enough to rein in spending.
But last month, tensions relaxed as Hein and Noble issued separate statements calling for talks between the city and towns and the county regarding shared services and other potential cost-saving measures. Hein, meanwhile, said that he could support a continuation of the current revenue-sharing formula only if it was tied to concrete goals and specific cost-saving objectives.
Noble declined to comment on the contents of the agreement pending approval by the Comptroller’s Office. Hein did not return messages seeking comment on the issue.