Ogdensburg on pace for $200,000 shortfall in sales tax
BY JIMMY LAWTON
North Country This Week
OGDENSBURG — In the wake of failed negotiations with county officials, Ogdensburg began collecting its own sales tax, unfortunately the move is not proving particularly fruitful.
Early reports show that Ogdensburg City Council likely over-estimated sales tax revenues when preparing the recent budget.A report from Comptroller Angela Gray showed the average monthly collection of sales tax revenue since breaking away from the county is $199,905.
In December, City Council decided to budget $2.6 million in revenue, despite hesitation from staff.
Based on the average, the city is on pace to bring in about $2.4 million, leaving a potential $200,000 gap.
In recent years sales tax revenues were high across the state, largely driven by high fuel costs and inflation, which has cooled some in recent weeks.
The potential gap in sales tax builds on concerns of overtime costs which are also on pace to pass budgeted amounts.
Ogdensburg began collecting its own sales tax last year in the wake of failed negotiations with the county over the distribution formula.
The decision to break away from the county sales tax formula was driven by the county’s plan to reduce the city’s share of sales tax collections.
Seeing the writing on the wall, Mayor Jeffrey M. Skelly and former City Manager Stephen Jellie launched a campaign aimed at securing adequate sales tax revenues for the city, but in the end the city came in at about $2.5 million less then they received under the old agreement.
The city also failed in its attempts to secure an additional .05% sales tax currently received by the county, which would have gone a long way toward making ends meet.
That reality is hitting hard in the city where fiscal stress is at a fever pitch.
Interim City Manager Andrea Smith has frequently noted the importance of keeping costs and revenues in line with the budget as the city has little wiggle room.
In March the duties will pass to Mohideen Buharie who was recently selected as the new city manager.
Council’s recently passed 2023 budget drew deep into the city coffers to keep the tax hike below the 2% tax cap.
The city did not budget for capital projects and would likely have to dip into its diminishing fund balance to address unexpected costs.
Additionally, the city has virtually no room for extra spending that would cause them to spend money beyond specifically what was budgeted as city officials chose not to pass a resolution overriding the tax cap.
Should the city exceed spending by error or necessity, it could miss out on state aid which the city depends on.