Izzo

Izzo: No answers yet in sales tax redistribution debate

Published Jan 6, 2017 at 4:00pm

The county’s sales tax committee is set to return to the issue Monday, and Rome Mayor Jacqueline M. Izzo said Rome is working hard with other municipalities to find the best formula for the future.

County Executive Anthony J. Picente Jr. formed a nine-member committee to review the current distribution arrangement and make a recommendation to him. It comprises county, city and town officials. At issue is how the money generated by the 4.75 percent tax levied on many retail purchases will be divided up among the county, cities, towns and villages going forward.

The response of the cities is critical because they have the right to levy their own sales taxes. Rome and Utica can reach an agreement with the county sales tax distribution or enact their own tax.

Rome’s annual budget is about $42 million each year. About 20 percent of revenue comes from sales tax. In 2015, the city received $9,330,547, up slightly from the year before.

The proposed redistribution of the sales tax revenues would result in an increase of about $500,000 for the City of Rome, according to the county. Izzo said Rome and Utica mayors and finance personnel have been meeting to wrap their heads around the current system and any possibilities. Those meetings, she said, could result in “another proposal put together by the cities.”

The county has said the current model as unsustainable. Izzo said changes could vary. “Do we need to tweak it in some form or not? That’s the crux of the whole issue. I would not say we have the answer yet,” Izzo said, adding one benefit of the discussion has been renewed talks about shared services, especially among neighboring municipalities.

The earliest any formula changes could be made is 2018.

The current formula for how the 4.75 percent sales tax is shared is as follows:

  • The first 3 percent. The county retains 50 percent. Rome and Utica each pre-empt 50 percent of the amount collected within their respective borders. The county distributes 50 percent of the amount collected outside of these cities to the towns, villages and city of Sherrill, based on property value.
  • An additional 1 percent. Rome and Utica each receive 50 percent of the amount collected within their boundaries (not pre-empted) and the county keeps the other 50 percent. Of the amount collected outside these two cities, the city of Sherrill gets a share based on population, $1.5 million is distributed to the towns and villages based on population, and the county retains the balance.
  • An additional 0.75 percent. The county retains all of this money.