Anthony J. Picente Jr.

Sales tax redistribution panel hits urban roadblock

Published Jan 11, 2017 at 4:00pm

There will be no changes anytime soon in how Oneida County shares sales tax money with cities, towns and villages.

An advisory committee put together by County Executive Anthony J. Picente to review the current formula and possibly make recommendations for changing how the money is divvied up has stopped meeting without taking any action. The panel of county, city and town representatives met in closed session Monday morning and it became evident there was no consensus on moving forward.

A key factor discussed at this meeting was the unwillingness of the cities of Rome and Utica to give up pre-emption relating to sales tax collection. The cities have the right to levy their own sale taxes. Without the cities dropping pre-emption, the panel had few options to consider when it came to revising the distribution formula, said several committee members contacted for this story.

“The sales tax issue is done....It’s over...for now,” Lee Supervisor John Urtz told his town board Tuesday night. He was one of three town supervisors on the review committee.

County Executive Anthony J. Picente Jr. said today that he’s willing to reconvene the panel he formed last year if Rome and Utica come back with another proposal. He said following Monday’s meeting he’s heard from the cities about the possibility of offering another plan. Rome Mayor Jacqueline M. Izzo and Utica Mayor Robert Palmieri are both members of the sales tax panel.

“I am not giving up on the concept (of revising sales tax money distribution),” said Picente. He formed the panel in hopes of revising the payouts so that the county, cities of Rome and Utica, and some of the larger towns got bigger shares of the sales tax money. He said larger governments need the money because they are asked to provide more services. Sales tax is the county’s largest source of money.

The county executive cautions that the current sharing arrangement isn’t sustainable and doing nothing will ensure a county property tax hike in 2018.

But, the cities giving up pre-emption is central to keeping the committee going.

The county executive said a proposal from Rome and Utica discussed at this week’s meeting that had the cities keeping the right of pre-emption was “unworkable and flawed.” He said the cities retaining pre-emption offers “no basis for moving forward” with formula revisions.

The city representatives on the committee “came up with a formula that gave them similar to what the county offered” in a proposed sales tax revenue distribution, said Urtz. An earlier scenario offered by the county called for increases in sales tax revenue of about $500,000 for Rome, $1 million for Utica and $6.5 million for the county. The cities dropping the right of pre-emption was assumed in the county’s plan but not in the one from Rome and Utica.

“For both cities that’s the biggest nut to crack,” said Rome Mayor Jacqueline M. Izzo. She said Rome and Utica are evaluating the situation. Izzo and Utica Mayor Robert Palmieri are both members of the committee.

The cities were interested in revising the distribution of sales tax collected within their respective boundaries, said Izzo. Picente wanted to adjust the sales tax distribution using the entire tax regardless of where it was collected. The tax technically has three parts: 3 percent, 1 percent and 0.75 percent for a total of 4.75 percent.

Board of Legislators Majority Leader George E. Joseph, R-10, Westmoreland, and Minority Leader Philip Sacco both agreed that the pre-emption issue left the committee with no path to proceed.

​Urtz said the mayors were concerned that the county’s potential redistribution was “open-ended” and could be an issue “if they wanted to collect money at a later date.” The mayors also cited challenges they would have in getting their respective common councils to agree to a pre-emption change.

Palmieri could not be reached Wednesday morning. His office said he was attending Gov. Andrew M. Cuomo’s State of the State address in Syracuse.

Sales tax distribution revisions require the approval of the county, Rome and Utica, and the state comptroller’s office. The towns and villages have no legal standing in this matter.

The committee being at the very least in limbo, if not dissolved, likely comes as a relief to some. The possibility that towns and villages might be receiving less sales tax money or even none under a new sharing framework had set off a firestorm among some local officials.

The county scenario before the committee called for phasing out distribution of the revenue to all villages in the county over a three-year or five-year period, plus it called for most towns to lose part of their annual revenues over the same period.

Urtz also noted that in the committee discussions, there were “ideas floated around” for some changes in municipal services, but people were “not totally receptive” to them.

Izzo said she’s reaching out to towns that surround Rome to discuss the potential for shared services.

Joseph said the idea of of the sales tax committee was to fix inequities in the distribution of the money and to see if there were ways the municipalities could do more collaboratively to cut taxes and expenses.

“I’m always willing to share my ideas,” he said.

Among the suggestions, Urtz said, several were geared to help relieve financial concerns that had helped prompt talk of redistributing sales tax revenues. Among the ideas, he said, were for towns to handle more public works duties instead of the county, and to seek state reimbursements for local municipalities that provide police coverage such as using county, village or town personnel; he said “the state is mandated to provide coverage.”