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Panel to be assembled to look at revising sales tax distribution

DAN GUZEWICH, Staff writer
Posted 10/5/16

Whether there needs to be a revision of how sales tax revenue is distributed among Oneida County and its cities, towns and villages is surfacing again.County Executive Anthony J. Picente Jr. has long …

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Panel to be assembled to look at revising sales tax distribution

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Whether there needs to be a revision of how sales tax revenue is distributed among Oneida County and its cities, towns and villages is surfacing again.

County Executive Anthony J. Picente Jr. has long said changes are in order and will soon assemble a panel of county, city and town officials to look at sales tax with an eye toward coming up with a new distribution formula that is more advantageous to the county, Rome and Utica, and larger towns because they have higher needs and provide more services than smaller municipalities.

He has been talking about the issue for several years and says he’s now ready to proceed with a formal review of the situation.

“Maybe we meet and it doesn’t get done,” he said Tuesday. “We’re at a point where we’ve got to take a look at it.”

Picente said his office has assembled data about sales tax and local budgets that will be used in the discussion.

Sales tax is the county’s largest revenue source although the amount received in recent years has leveled off. Collections did not meet the anticipated amounts in 2015 and won’t this year.

Serving on the panel will be: the county executive, Board of Legislators chairman, legislative majority and minority leaders, mayors of Rome and Utica, and three town supervisors designated by the Oneida County Association of Towns.

He announced the sales tax committee in his 2017 budget address Wednesday morning.

The county’s sales tax technically has three parts that have been enacted over time and now add up to 4.75 percent:

—The 3 percent and 1 percent components are divided up among the county, cities, towns and villages under two formulas.

— The 0.75 percent part generates money only for the county. 

Consumers pay a 8.75 sales tax in the county thanks to the county and state taxes. The state rate is 4 percent. 

Picente does not expect the total rate to be cut or increased. He’s looking for a redistribution of where the money goes starting in 2018 and not a change in the rate.

“Our current formula does not properly reflect the functions and roles governments play in this county,” said the county official in his 10th annual State of the County message in March.

“The current structure doles out dollars to all levels with no regard to true economic impact. A new formula must reflect the needs and contributions of the larger governments.”

He added, “County government cannot continue to take the lead in public safety and economic development, as well as serve those in need when sales tax loss is greater than the amount we can raise in property taxes.

The cities of Utica and Rome will be unable to attract development and residents as long as property taxes climb.

“The towns of New Hartford and Whitestown cannot sustain the strain of retail and industrial growth without harming their tax base. A scenario in which village governments no longer exist can propel us to the right size of government to fit our population.”

Rome Mayor Jacqueline M. Izzo and Utica Mayor Robert Palmier released a statement right after Picente’s State of the County speech expressing their support for a review of sales tax distribution.

“We stand united and offer our assistance to pursue this worthy and necessary endeavor,” they said.

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