The state Legislature may wrap this year’s session without passing county sales tax rate extensions, leaving nearly $2 billion in sales tax revenue for 53 counties up in the air.
The 2017 legislative session ends Wednesday, and lawmakers are still mulling a number of issues before that deadline comes, including the expansion of charter schools sought by the state Senate and expanding New York City’s mayoral powers to control public schools. Earlier in the session, the Assembly passed a two-year extension of mayoral control that also links it to the county sales tax extenders.
Assembly Speaker Carl E. Heastie said Monday that the Assembly has passed the sales tax extensions for counties, leaving it up to the Senate. But Senate Republicans have criticized the Assembly for linking mayoral control with tax extenders, and they may not move on the bill unless charter schools are expanded.
Gov. Andrew M. Cuomo has said that a deal between the Assembly and State Senate is unlikely to happen by Wednesday, meaning legislators could be called back to Albany for a special session later in the year, and the extenders will be passed then.
Counties, however, have their budgets devised by the end of September or early October. If legislators opt to address the extenders at a later, unknown date, county officials could be left not knowing whether to anticipate the sales tax revenue.
Because New York counties are required to contribute to state Medicaid costs, each county is allowed to levy a sales tax rate of 3 percent. If counties want to go higher, they need approval from the state legislature every two years. Nowadays, most upstate counties have a 4 percent sales tax levy.
For Jefferson County, that additional 1 percent helped garner roughly $20 million in additional sales tax revenue in 2016, bringing the total levy to about $75 million. The money is then split among the county, the city of Watertown and towns and villages.
But without an extender approved by the state, Jefferson County and its municipalities would not be able to realize that money next year. Scott A. Gray, chairman of the Jefferson County Board of Legislators, said the county would lose about $10 million, the city would lose $5 million and the remaining municipalities would also lose $5 million.
Mr. Gray said that the county would in turn have to increase its property tax levy by about 18 percent to make up for the revenue, meaning legislators would have no choice but to override Gov. Cuomo’s 2 percent property tax cap.
Holding out on approving the extenders, Mr. Gray added, will only create bad blood between local governments and state lawmakers.
“They are asking for an adversarial relationship, and this is one way to get it,” he said.
If the legislature holds off on approving the extenders until after counties must devise their budgets, Mr. Gray said he and county officials may develop two potential budgets — one that accounts for the revenue and one that doesn’t — so the county has a contingency plan ready to go.
Lewis County, which does not dole out its sales tax revenues to local governments, could be looking at a $2.8 million gap without the extender, based on its 2016 sales tax collections of about $11.4 million.
“It’s frustrating beyond belief, but not unexpected,” said Lewis County Manager Elizabeth Swearingin, regarding the state legislature’s linking of the extenders to a downstate policy decision.
St. Lawrence County, which collected $54 million in sales tax revenue last year, would lose between $13 million and $14 million next year without the extender; and Oswego County, which garnered about $41 million in sales tax last year, could lose between $10 million and $11 million next year.