Particulars of sales tax pact remain shrouded

dollar-sqCity of Kingston and Ulster County officials say they’ve reached agreement on a new revenue-sharing plan, ending a month-long standoff over how to dole out $109 million in annual sales tax revenue. Ulster County Executive Mike Hein and Kingston Mayor Steve Noble issued a joint press release late Friday afternoon touting the agreement.

“We have jointly designed a framework that can both improve services for the citizens of the City of Kingston and throughout Ulster County through multiple shared-service initiatives, and resolve any outstanding issues regarding sales-tax distribution,” the statement reads. The release didn’t contain details, stating only that a proposal would be unveiled this week.

Kingston Common Council Majority Leader Bill Carey said that he was not privy to details on the agreement. But he expressed confidence this week that the deal would leave the city’s budget intact, at least for now.


“I have complete faith in the mayor and I don’t think Mike Hein would do anything to make the city desperate,” said Carey. “My hope is that [the distribution formula] will stay the way it is at least for a couple of years to give us time to prepare for any changes.”

If finalized, the agreement will end the city-county spat over a new contract to govern sales-tax distribution. Under the terms of the five-year agreement which expired Feb. 29, the county gets 85.5 percent of all revenue generated by the four-percent citywide sales tax. The city receives 11.5 percent, and the remaining three percent is shared by Ulster County’s 20 towns based on assessed property values.

In exchange, Kingston doesn’t impose its own sales tax, which would deny the county sales-tax revenues generated within city limits. The proportions have remained fixed since the late 1990s, when Kingston’s share was raised from 10 to 11.5 percent and the towns from two to three percent.

Mayor Steve Noble. (Photo: Phyllis McCabe)

Mayor Steve Noble. (Photo: Phyllis McCabe)

Last month, county legislator Richard Gerentine, chairman of the legislature’s Ways and Means Committee, proposed returning to the previous distribution formula. Gerentine said that the county’s assumption of Safety Net welfare and election costs previously borne by municipalities justified a bigger county tax take. Gerentine’s proposal was roundly rejected by city officials.

Gerentine’s proposal set off a strong backlash from city and town officials who accused the county of trying to fill its own coffers while blowing major holes in their budgets. Noble noted that sales tax receipts were second only to property taxes in the city’s revenue stream and Gerentine’s proposed reduction would cost city taxpayers about $1.6 million annually. Noble rallied town supervisors to his cause; several towns passed resolutions calling for no change in the distribution formula and lobbied their county legislative counterparts to resist any effort to alter it. Hein didn’t take an official stance on the issue, but nonetheless criticized Kingston and other municipalities for, he said, failing to follow the county’s lead in streamlining government and further failing to pass savings from the Safety Net welfare program, now paid for by the county, on to local taxpayers.

Noble, with backing from many town officials, called for a new five-year agreement that would maintain the status quo. While some legislators, including Chairman Ken Ronk, called for further negotiations with the city, the only proposal for a new contract came from a pair of Kingston legislators who called for a vote on a status-quo five-year contract. Meanwhile, Hein and Noble both called for closer collaboration between municipalities and the county and meetings to discuss potential cost saving initiatives and shared services.