New sales-tax deal in the works among Ulster’s municipalities

In a year when all levels of government are starved for revenues because of the pandemic, none of them are in a generous mood with each other. So it makes sense for them to want to postpone the discussion of new revenues until such a time when there are new revenues.

In that spirit, the Ulster County Legislature at its September 16 meeting approved changes to the agreement for the sharing of sales-tax revenues among municipal governments. If more sales-tax monies come in during any of the five years covered by the agreement, Kingston and county officials would meet by May of the following year to discuss how it will be shared. Given that no one knows what will happen to the economy as long as Covid-19 is around, the legislators had found a sensible way of kicking the proverbial can down the road.

 State law entitles cities and counties to a portion of sales tax collected, four percent in Ulster County therein. How it’s divided can be modified by an agreement such as the one in Ulster County. Half the taxes go to Albany, and of the remainder 85.5 percent goes to the county government, eleven- and-a-half to Kingston, and the remaining three percent is distributed among the 23 local municipal jurisdictions. This agreement likely yields more sales-tax revenue for Kingston than would be collected directly in the city limits. 

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Some municipal leaders, such as New Paltz mayor Tim Rogers, have advocated for more of the county portion to be shared with them. Rogers most recently argued that this year’s agreement should only be for a year due to the uncertainty posed by the pandemic. Other supervisors and mayors have reportedly balked on pushing too hard out of concern that they may end up with even less.

A “high-water mark” plan would go into effect if more than $128,561,331 is collected. That sum is exactly what was budgeted by the county for total sales-tax revenues in pre-pandemic 2020 and approximately what was received in 2019. Exceeding that take would trigger a meeting between county and city officials by the following May. Additional sharing would require approved by both Kingston’s common council and the county legislature. 

Brian Cahill, a legislator who pushed for the change, said the agreement was “a big deal” because “it’s the first we’ve ever seen it.” Minority leader Ken Ronk said Ulster supervisor James Quigley first proposed the idea, nine months ago. Legislator Manna Jo Greene urged her colleagues to start working on the next agreement sooner.

New Paltz legislator Eve Walter was one of those who worked on changing the terms. “While I believe that we should we re-conceptualize the entire process, I also recognize that given the pandemic and the impact on revenue, the timing is not right,” she said. “For the next five years, there are several ways to utilize the excess funds. What is particularly important to me is to distribute them to the towns and villages based on population, not housing assessed value. Currently the small percent distributed to towns and villages outside of Kingston is based on equalized assessed values. This hurts communities that support higher populations and/or lower housing values”

Walter support the suggestion that distributing by population would be more equitable and progressive. She wanted more emphasis on shared services.

There is one comment

  1. Stephen Cook

    What is Noble going to give away the store, that has Been in existence for years. This guy has no clue, create bike lanes look what he has done to Greenkill Avenue.

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