Canton town declines passing resolution to keep current county sales tax formula
Tuesday, February 18, 2020 - 1:12 pm

North Country This Week

CANTON – A resolution calling for “no changes” to the county’s sales tax distribution to municipalities has failed to get any traction at the town board level, with at least one board member opting to wait and see if Canton gets a better take from the pot.

Town Supervisor Mary Ann Ashley proposed the resolution at the town board meeting Thursday, Feb. 13. Ashley’s motion to approve the resolution, however, failed to get second and it died on the floor during the meeting.

“Since there’s no second this motion is dead, the resolution is off the table,” Ashley said. “I am going on record that I’m going to continue to be vocal about this.”

Ashley has voiced opposition to the county’s ongoing re-negotiation with the City of Ogdensburg over the complex formula of how it distributes sales tax revenue to the city, towns and villages. The current agreement is 10 years old and due for renewal. Changes are expected as the current formula is based on the data from the last census 10 years ago. New numbers from the 2020 census will change the outcomes, and the county is also considering sales tax as a source of new revenue streams to pay for unfunded state-mandates.

The town supervisor’s concerns mirror that of other municipal officials that the municipalities, who have no say in how the distribution is allotted, stand to lose a substantial amount of annual revenue should the percentages be altered in any way under a re-negotiated agreement.

The resolution the town board considered was similar to one passed by the village last month.

“My concern with the resolution… I don’t know what ‘no change’ means,” said Town Councilman Tim Danehy, after Ashley’s motion failed to get a second. “Does that mean ‘no change’ to the percentage of distribution that was established on data that is 10 years old? Or is it no change to the formula with the new data plugged in? I don’t know what that means.”

“It (the distribution to Canton) could be improved,” Danehy said. “To keep doing something for the sake of that’s what we are comfortable with and that’s how we’ve been doing it is not why I’m here.”

“This (the resolution) is premature. We have a lot more to learn about what actually the impact is going to be for us, and everybody else, before we support or oppose,” Danehy said.

Earlier at the Feb. 13 meeting the town board heard from St. Lawrence County Legislator Dan Fay on the issue.

“Basically, we (the county) are reading that the board of legislators is going to hit the towns with a loss of sales tax. I’m no magic man but basically I’ve set through the meetings and I’m on the negotiating committee with Ogdensburg. And I honestly do feel that Ogdensburg is going to take some type of hit,” said Fay.

Fay said however that he was unsure what type of hit. The legislator said the distribution, being based on the census from 10 years ago, is probably $1.9 million too high for Ogdensburg currently.

He said the question at hand for the legislators and the negotiating committee is how to get that money distributed properly and fairly.

Fay went on to say that he doesn’t foresee a change in the distribution to the municipalities in the wake of a renegotiated agreement.

“Right now, I came here tonight to tell you I do not think any village or town is going to get hit, or any loss with what they are presently getting. And hopefully sales tax dollars will keep going up and you get more,” Fay said. “I can’t guarantee you that, but basically that is what I am here to tell you tonight.”

“I’ve been saying it since the beginning since the negotiations started, I’ve had conversations with Kevin Acres and Dan (Fay) quite a bit. And we can’t afford to lose any revenue,” Ashley said before she proposed the doomed resolution. She said Fay’s predictions of no loss of revenue to the towns under a re-negotiated formula was “good news.” “But I still hold my position of opposition to any change to the apportionment,” Ashley said prior to the vote.

Under the 10-year-old contract which dictates how sales tax revenue is distributed, towns and villages get a share of the sales tax pot, but, under state law, only cities (in this county only Ogdensburg) have any say in how much is distributed and in what percentages.

Ogdensburg and the county are negotiating a new formula. What results from those discussions will affect how much the other municipalities take away from the table.

The current system is tied to census data and could be considered complex. The state takes half of the 8% sales tax collected in St. Lawrence County, and the county collects the remaining 4%.
Then half of the first 3% of the 4% total received back from the state goes to the county. The other half of the first 3% is divided, with 6.4% of that going to the City of Ogdensburg and the remaining 43.6% divided between the towns and villages.
The remaining 1% of the 4% total received from the state is divided, with 83.6% kept by the county, Ogdensburg getting 6.4% and the remaining 10% doled out to towns and villages.

In dollars, the re-funneled sales tax revenue means hundreds of thousands of dollars for local municipalities. In 2018 the towns, villages and City of Ogdensburg took home $24,259,603 of the total sales taxes collected that year.