Two county legislators from Kingston have introduced legislation to end a standoff between the city and county over sales tax revenue. But the proposal by Democratic legislators Dave Donaldson and Jennifer Schwartz Berky, which would maintain the current sales tax distribution formula for another five years, faces opposition from Republican legislature Chairman Ken Ronk, who says he’s disinclined to approve a “status quo” agreement.
At stake is the division of some $109 million in annual receipts from Ulster County’s 4 percent sales tax. Under the terms of a contract that expired on Feb. 29, the county gets 85.5 percent of the total. The city receives 11.5 percent and the remaining three percent is divided among Ulster County’s 20 towns, based on assessed property value. In January, Ways and Means Committee Chairman Richard Gerentine (R-Marlboro), citing increased costs to the county after it took over Safety Net welfare and elections costs, proposed returning the distribution formula to the 1990s formula, when city got 10 percent and the towns 2 percent. At the time Gerentine made his pitch, Ronk said that he would not support any cuts to the towns’ 3 percent share. Despite those assurances, at least 10 Ulster County towns joined Kingston in calling for the agreement to remain unchanged.
Last month, days before the agreement was set to expire, Kingston Mayor Steve Noble won approval from the Common Council for a new contract maintaining the existing formula for another five years. Ronk said that he was caught off guard by the city’s move and hoped that Noble would resume negotiations with county officials.
Meanwhile, county lawmakers have yet to put forth their own formal proposal. Last week Ronk and Gerentine said that they were doing “due diligence” before coming up with a counter offer.
But Berky and Donaldson struck first. Their proposed resolution calls for a new five-year agreement with the distribution formula unchanged. The resolution, said Donaldson, is expected to go before the legislature’s Ways and Means and Laws and Rules committees. If it clears the committee process, it could come up for a vote before the full legislature on April 19.
Donaldson said that he was worried the impasse could stretch beyond the state’s June reporting deadline for sales tax revenue.
“I figured somebody’s got to do something,” said Donaldson. “I don’t want to turn around and it’s June and the proverbial crap hits the fan.”
Donaldson said he was unsure whether the resolution had the votes to pass the full legislature, or even clear the committees. While Ronk and Gerentine have come down in favor of some alteration of the formula, legislators have sent mixed signals on how and when it could be changed. In his state of the county address on Tuesday, Minority Leader Hector Rodriguez (D-New Paltz) said the distribution formula should remain unchanged for at least two years.
“For sure, we don’t want any adjustments while the towns are mid-year in their budgets,” said Rodriguez.
Ronk later agreed that any change in the formula should be put off at least until current budgets are complete. Meanwhile Majority Leader Mary Beth Maio (R-Lloyd) made no mention of the sales tax issue in her own state of the county speech.
Republicans hold a 12 to 11 majority in the legislature, with Accord Democrat Richard Parete caucusing with the GOP. But it’s unclear whether the vote on the sales tax issue will break down along party lines. Berky said she believes support for changing the formula will be strongest in the southern part of the county where property values are higher and many residents believe too many of their tax dollars go to Kingston. Donaldson, who accused Ronk of fomenting a “divide and conquer” strategy of leaving the towns whole while working to claw back Kingston’s share, said the vote would depend on whether legislators heeded the wishes of their town officials who have asked for the formula to remain unchanged.
“I don’t know how all the various legislators are going to vote,” said Donaldson. “Will they vote with what their town boards want or will they join the ‘screw Kingston’ crowd?”
With additional reporting by Hugh Reynolds