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Despite recession, Schuyler’s sales tax revenue is solid

WATKINS GLEN—Despite the recession, Schuyler County’s fourth quarter 2008 sales tax revenue was down only slightly from the same period a year ago.
And for the first month of 2009, sales tax collections were up six percent from the January 2008 level.
County Administrator Tim O’Hearn said it’s too early to predict whether that early uptick will persist throughout the year.  In the fourth quarter of 2008, Schuyler County took in $2,051,900, down from $2,093,935 in the fourth quarter of 2007, according to figures provided by the county treasurer’s office.
The county distributes 25 percent of its sales tax income to its eight towns and four villages. In the final quarter of 2008, the municipalities received $512,975, down from $523,483 in the same period the previous year.
Sales tax revenue is important because it accounts for 25 percent of the county’s revenue stream, O’Hearn said.
Despite the small fluctuations in sales tax collections in the final quarters of 2007 and 2008, there were major shifts in the amounts of money distributed to local municipalities.
In Watkins Glen, for example, the village’s share went from $59,097 in the fourth quarter of 2007 to $50,705 in the fourth quarter of 2008 -- a drop of 14 percent.
The Town of Hector’s share jumped from $138,516 in the last quarter of 2007 to $185,274 in the final quarter of 2008-- an increase of 33 percent.  O’Hearn said shifts in property values among the communities resulted in the changes. Sales tax is distributed on the basis of the total assessed value in each municipality.
Hector Supervisor Benjamin Dickens said the town’s share of sales tax income jumped because the municipality began to assess property at 100 percent of market value in 2007.
As the other municipalities move to 100 percent assessment, Dickens said, Hector’s share of sales tax is expected to return to its previous level.  He said the additional funds help keep taxes down and fund highway work on Hector’s 150 miles of town roads.  Watkins Glen Mayor Judy Phillips said the village’s loss of sales tax revenue resulted from taxable properties being removed from the tax rolls.
One of the properties is a parcel across from Watkins Glen State Park that the state purchased for development as a parking lot. Another is a group of four parcels on Second Street purchased by the Watkins Glen Housing Authority, which operates Jefferson Village Apartments.
Phillips said the loss of sales tax revenue will be taken into consideration as the village prepares its 2009-2010 budget that takes effect in June. She said heads of village departments have been asked to cut their budgets by 10 percent.
Schuyler’s total 2008 sales tax revenue -- before distributions to the towns and villages -- was $8,335,352, up 3.7 percent from the 2007 total of $8,034,217.  O’Hearn said the county realizes most of its sales tax revenue in the third and fourth quarters and has budgeted for a 3 percent increase in 2009.  If that increase doesn’t materialize, O’Hearn said, the county can absorb the lost revenue internally in its $40 million budget.
“If we’re also looking at increased unemployment and services, that will be more difficult,” he said.
Schuyler could also realize another $200,000 annually in sales tax income if the state abolishes the local option to exempt some clothing purchases from sales taxes. That would mean an additional $50,000 to be divided among the local municipalities.
“It’s very likely we will be looking at a sales tax on clothing as of July 1,” O’Hearn said. 

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