The Ulster County Legislature’s 18-4 approval of the sales tax agreement between the county and the City of Kingston was a foregone conclusion. Some called it the “Mike Hein sales-tax agreement,” citing the county executive’s influence and avid promotion of the pact among legislators.
That Pete Loughran split with fellow city legislators Dave Donaldson and Jennifer Schwartz Berky may have come as a mild surprise. Delegation solidarity has rarely been the case with city lawmakers.
Most non-city legislators didn’t need much persuasion, given the hold-harmless clause for towns in the agreement and the long-standing discord between town and city mice. “You know these legislators don’t give a damn for the city,” Loughran said after he voted as they had. Left unsaid was that most of those legislators had voted for relief of county-imposed Safety Net and election expenses that had cost the city and many towns dearly. But that was then.
Judging by the deafening silence on specifics, I remain convinced that most legislators had only the vaguest idea of what they were voting for. The county comptroller released a study a few days after the vote which confirmed some suspicions and assuaged others. The study, examining complicated stuff, would have had minimal impact on minds already made up.
“Why,” one legislator lamented, “couldn’t they just have extended the [simple] agreement already in place?”
Schwartz Berky, one of the more studious solons, spoke only about a hurry-up secretive process that she said did not allow for informed debate. In fact, there was none.
Slouching toward sales taxes
Under the existing agreement, negotiations were supposed to begin in June, well in advance of its end-of-February expiration. In an election year, neither side seemed willing to submit this hot potato to public scrutiny.
Legislature Chairman Ken Ronk, the only proponent to speak on the subject, applauded what he considered a fair compromise. He, too, offered no details. Previously he had said that county legislators needed to protect county revenues, thus as the legislative leader defining his colleagues’ priorities as county officials. One wonders how that will play when legislators go campaigning in their hometowns next year.
T.J. Briggs voted against the legislation, establishing himself as a town supporter. Briggs, a Democrat, will be running for Wawarsing town supervisor next year.
Former legislator chairman John Parete also voted against the pact, perhaps out of loyalty to Dave Donaldson, or maybe just to be contrary, a flip of the finger to the Hein administration.
Donaldson groused about the contract possibly costing the city $5 million, but that would only happen if the 1 percent sales tax surcharge gets hung up by the state legislature again.
It appears that negotiators spent a good deal of their time on that 1 percent component. First enacted and approved by the state some 25 years ago as a temporary measure and extended every two years since, the 1 percent surcharge is projected to produce about $27 million of the $110 million the county expects to collect in sales taxes this year.
The 1 percent can go away if nobody in the county’s eight-person state legislature delegation agrees to sponsor an extension or if the state itself rescinds the 1 percent surcharges statewide. Neither scenario is likely, given the political blowback. If it does happen, the city would be hurt more than the county. Forty percent of city and town sales tax share going forward is to be taken out of that 1 percent, which is where Donaldson’s “$5 million hit” comes from.
The city faced a far worse scenario. In exercising pre-emption (taking back the right to levy a sales tax within city limits that the city ceded to the county many years ago), what some called “the nuclear option” and others “a game of chicken,” Mayor Steve Noble now says Kingston could have lost upwards of $8 million off the annual $12 million it currently gets from the county. Under that scenario, the county would keep the sales tax it was sending the city, reducing its overall loss by perhaps $13 million. Given this dilemma, the county had the stronger hand. Unlike the city, the county has the authority to charge back other municipalities for county services rendered.
City officials contend that they achieved a degree of certainty, at least for the first two years of the five-year agreement, in maintaining their 11.5 percent of revenues over its term. What they traded away was potential upside growth, something the contract retains for the county.
Looming over negotiations was that a stagnant, if not declining, economy might produce less sales tax revenues. The recent closing of two mall anchor stores, Macy’s and Penney’s, was a signal not lost on anyone.
Kingston and the towns now have two tax caps, one on property taxes and the other on sales taxes. The wiggle room on future budgets represents pennies on the dollar. With the mayor’s nascent administration apparently sufficiently stocked with new hires, it would appear some serious belt-tightening will be the order going forward.
Last week, the Common Council’s Finance Committee voted 3-2 against the sales tax agreement their mayor had negotiated, with some members reserving the right to vote the other way when it comes to the floor at regular session on June 7. Some will hold their noses, but it will pass.
It seems the focus of train advocates has undergone a cosmic shift from advocating for the Catskill Mountain Railroad, soon gone choo-choo into history, to saving tracks on which future trains might run.
At last week’s monthly meeting of the legislature, the Save-the-Tracks coalition faced off against its Keep-the-Compromise counterparts. Among some 50 speakers or their proxies, I didn’t hear a single voice for CMRR. The railroaders’ 25-year lease will expire next Tuesday. And while they have filed a proposal to extend operation another five years, the chances of approval seem virtually nil.
Essentially, the late-blooming Save-the-Tracks group wants the county to refrain from removing any track along the 38-mile rail corridor from Kingston Point to Highmount at Belleayre.
The compromise approved by the legislature in December calls for removal of about eleven miles of track around the Ashokan Reservoir for walking-biking trails and some three miles from Kingston Point to Kingston Plaza for similar purposes. Kingston’s linear park would be built by the county and maintained by the city. The New York City Department of Environmental Protection, via a $2.5 million grant, would fund the Ashokan walkway.
The county legislature approved a $395,000 design expenditure from that grant last week.
Some speakers characterized the DEP deal as “another city land grab,” while others wondered why the county executive, who once described the agency as “an invading army,” wasn’t paying more attention to flooding and debris issues in the Esopus Creek caused in part by his new DEP ally.
The trail people didn’t have to do much more than wave bright yellow signs urging keeping the compromise and speaking to the benefits of healthy living. Their side has won. As CMRR discovered to its chagrin, no amount of lobbying the county legislature was going to significantly change things.