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New sales tax plan a relief to some, unacceptable to others

by Hugh Reynolds
August 30, 2016
in General News, Politics & Government
1
County Executive Mike Hein. (Photo: Phyllis McCabe)
County Executive Mike Hein. (Photo: Phyllis McCabe)

The city-county sales tax agreement negotiated by Kingston Mayor Steve Noble and Ulster County Executive Mike Hein and unveiled this week is, compared to its counterparts over the past 40 years, a complex document with numerous moving parts. But the haggling may not be over.

“I’m very confused,” said Rochester Town Supervisor Carl Chipman, head of the Ulster town supervisors/mayors association. “It seems we’ll be getting a hell of a lot less than we actually received before.”

The towns were not party to the two months of closed-door negotiations between the city and the county. The State Comptroller’s Office and the state Department of Taxation and Finance approved the pact after a three-week review.

Chipman said he’s asked the county for “a complete mathematical breakdown” of the contract and its impact on all parties. Since the towns “were not at the table” (neither were any county legislators or city aldermen), he said, the towns were “totally dependent on their legislators that represent them to represent the towns’ interest in these negotiations.”

Alderman-at-large Jim Noble, the mayor’s uncle, expressed dismay at the proposed settlement. “It holds us hostage,” he said. “It could cost us $5 million, which would be devastating. That has to change.”

The contract maintains the split percentages of 85.5 percent for the county, 11.5 percent for the City of Kingston and 3 percent shared among the county’s 20 towns, but also institutes a “growth freeze” on those shares in the later stages of the five-year agreement. The deal puts a further onus on the city-and-town shares should the 1 percent extension to the three percent sales tax the county is allowed to levy, an extension that must be renewed by the state every two years, not get state approval.

Assemblyman Kevin Cahill, a Noble ally, said the mayor and his negotiating team “made a pretty good deal, considering they were up against a seasoned, experienced opponent.” Noble took office Jan. 1.

Noble said the Common Council’s Finance Committee would review the proposal at its May 18 meeting, followed by a special meeting of the council the next night. “Will they reject it?” he said. “I’m not sure.”

Complicated? Convoluted? Ambiguous?

County Comptroller Elliott Auerbach said he and his staff reviewed what he called a “complicated and convoluted document” three times. “This thing reads like the Magna Carta compared to previous agreements. It doesn’t have to be this way,” he said.

Auerbach, a Democrat, called the proposal “a masterpiece for the county,” but agreed with Council President Noble that Kingston could see some “dramatic changes” in the out-years of the five-year agreement.

On the upside, he predicts the county’s willingness to absorb Kingston’s mass-transit system could be a benefit to the city “if sales tax receipts decline.”

Auerbach also expressed concern about the renewal of a “timeliness clause” in the proposed agreement which requires the county to turn over respective shares of sales tax receipts to the city and towns within a week to 10 days of receipt from the state.

Auerbach said his office would continue to review the proposed contract and would issue definitive opinions at an early date.

Mayor Steve Noble. (Photo: Phyllis McCabe)
Mayor Steve Noble. (Photo: Phyllis McCabe)

Ulster Town Supervisor Jim Quigley is also asking the county, through the supervisors’ association, to renew language that requires negotiations on the extender to begin in June, “so we don’t get into a situation like we had this time,” he said, referring to the eight-week lapse in the contract. Quigley called the proposed contract “ambiguous” and “punitive” in terms of its impact on the city and the towns. Among the contract’s various provisions is a “growth freeze” on city revenues.

Last winter, the Common Council gave Noble authority to seek a five-year status-quo renewal under current terms, but that’s not what he came back with. The mayor acknowledged that his “compromise” with the county will result in the city and towns receiving something less under the proposed contract.

Long festering

The county takes the position that having granted the city and towns some $30 million a year in Safety Net and election expenses as agreed to under the 2014 1 percent sales tax extender deal, it needs money “to offset critical county expenses,” according to the joint release.

In that statement, Hein said the agreement “first and foremost, benefits all of our citizens.” He went on to thank the mayor for agreeing with him that “status quo government is simply unsustainable” and lauded all involved parties for “their steadfast commitment to altering the status quo and advocating for improved and more cost effective government, increased fairness, and most of all, greater services for all our citizens.”

Under the proposal the two sales taxes that the county is allowed to impose by the state (the state takes half of the overall 8 percent), a 3 percent more or less permanent imposition and the 1 percent extender are treated separately. The 1 percent, called a surtax, must be renewed by the state every two years.

The previous agreement between the parties, negotiated in 2001 and twice renewed, expired on Feb. 29. It called for the city to receive an 11.5 percent share of the county’s sales tax take, projected at $12.7 million in revenue in 2016, and for the 20 towns to share 3 percent of gross revenues, worth $3.3 million.

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Tags: Dave Donaldsonelliott auerbachJames Quigley IIIJim NobleKen Ronkkevin cahillmike heinsteve noble
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Hugh Reynolds

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