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County Sales Tax Renewal and .5 Percent Increase Approved in Committee
Concerned Legislators demand answers on shortfalls and revenue streams
by Margaret Sternberg
Toward the end of the lengthy March 26, 2007 meeting of the Audit & Administration Committee, legislators reluctantly voted to approve both the renewal of the .5 percent increase in sales tax due to expire this year and for the imposition of a new .5 percent increase in sales tax, which, if approved by the State Legislature, will bring Putnam County's sales tax to 8 3/8 percent, among the highest in the region.
The contentious meeting left many questions unanswered, but marked the beginning of increased scrutiny by the County Legislature of the county's revenue figures.
County Executive Bob Bondi and Commissioner of Finance William Carlin, who both attended the meeting, were called upon to justify the sales tax requests as well as to provide assurances that the numbers would have a significant impact in reining in a prospective 66 percent increase in property taxes. Mr. Bondi had prophesied in his 2007 State of the County Address that "…failure to either renew or increase…the sales tax rate will…have to be offset by either a 44 percent property tax increase or a minimum 20 percent reduction in the size of the County operating budget that will result in across the board elimination of core county services, or a combination of both."
It was the threat of cutbacks in services and/or high property tax increases, legislators agreed, that compelled them to agree with Mr. Bondi that the renewal and increase of the sales tax was the lesser of two evils.
Legislator Sam Oliverio said the purpose of government is to "help save the quality of life issues, those services need to remain; they enhance what we have as individuals living in this community." Oliverio continued that he was not in favor of cutting any services, citing museums, arts, education and libraries as necessary services. Saying he would like to see revenues increased, but "not on the backs of our taxpayers," Oliverio called the prospective rise in property taxes an "onerous burden" to residents.
Committee Chair Tony Hay, who operates a retail store, said that the raise in sales tax would have an affect on sales, but that he would support the sales tax increase because "if not, we have to hit them [property owners] with the property tax." Hay also noted that when the 2007 budget was presented, the Administration had requested a .25 percent increase in the sales tax, and the request has since been increased to .50 percent. The Administration, he said, could not continue to rely on finding revenue by raising sales tax; "the well is dry."
Finance Commissioner Carlin said that the current setting of the sales tax rate would "probably stand for the next three budgets."
On the heels of general questions regarding the county's budget, Legislator Vinny Tamagna again called for an independent financial review of the county's finances as a means to explore cost cutting efficiencies. Tamagna also suggested, as a means of raising funds, the implementation of a "development tax" on developers of condo complexes.
CSEA Unit 8150 President, John Bennett said the union was also in agreement with the Administration that the sales tax should be raised. "Constituent services are very important to the people of Putnam County, and it has to be paid for. We also know that tax increases on property cannot be sustained on an ongoing basis. To ask Putnam County taxpayers to pay 66 percent next year can't be done."
Newly-elected State Assemblyman Greg Ball questioned whether the County had done all the cost cutting it could. Chairman Hay responded that unfunded state and federal mandates also hurt the county's finances and requested that Ball look into the tax burdens caused by the way schools are funded as well as the unfunded mandates that are passed on to the county.
Although Legislator Dan Birmingham defended the County's cost cutting measures, he also expressed concern about the possibility of the County experiencing deficits in revenue. Birmingham warned the County Executive that under the County Charter, if the County Executive realizes there will be a deficit in any revenue for the current fiscal year, he must certify that to the legislature and make recommendations for corrective action. The legislature then receives the corrections and recommendations makes decisions on a remedy.
Democratic Chair for Putnam County Lynn Eckardt, suggested the consolidation of town, village and county services calling it "not acceptable…to keep going the way we're going," explaining that using both attrition and the raising of sales tax were not adequate to address the financial issues facing the county.
One means of consolidation of services that was discussed was a partnership of the county and the school districts. County Executive Bondi said that the county was already partnered in a BOCES study on possible consolidation, and that once the study was complete, it would be forwarded to the county.
Legislator Tamagna said, "We continually take a look at doing things the same way, resulting in the same outcome, which is that we are in trouble with our budget. We need to look at things from a new perspective, so that we can develop new, creative solutions that will result in a better approach to budgeting. The County is small enough and manageable enough that we can change the course without a huge impact for the future; we can manage to manage it for 100,000 people."
The Audit Committee is next scheduled to meet Monday, April 23, at 7pm in Room #318 of the County Office Building in Carmel.
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