MASSENA The village Board of Trustees is divided on whether to urge the St. Lawrence County Legislature to seek home rule legislation to increase its share of the sales tax from 3 percent to 4 percent.
Mayor James F. Hidy introduced a motion at last weeks board meeting supporting a sales tax increase in the wake of a multimillion-dollar shortfall facing county government.
After some debate, the board tabled the motion. It will re-examine the measure after it has a chance to discuss the countys situation with the three county legislators who represent Massena.
The county must get state legislation to raise its sales tax from 3 percent to 4 percent, on top of the states 4 percent.
Republican state Sens. Patricia A. Ritchie and Joseph A. Griffo have both been cool to the sales tax hike, and their support is critical to moving the measure through the state Senate. They also have suggested Gov. Andrew M. Cuomo would be unlikely to sign legislation allowing a tax increase.
The towns and villages are being asked to support the countys effort to get the increase approved, County Legislator Daniel F. Parker, R-Potsdam, said at a recent Stockholm Town Board meeting. The resolution has been on the agenda at town and village board meetings around the county in recent weeks.
If the towns all support home rule, and the county wants to support the sales tax increase, its pretty clear to the state that thats what they want, Mr. Parker said.
Mr. Hidy said he would like the county to increase sales tax by 1 percentage point because he finds it preferable to the alternatives, which include property tax hikes or a redistribution of county sales tax revenue to the municipalities.
To help reduce a projected 20 percent tax levy increase, legislators first broached keeping one-third of the sales tax traditionally distributed to towns and villages, an idea universally panned. A later proposal called for the county to keep 10 percent of the sales tax revenues that normally would go to towns and villages. The village of Massena receives approximately $1 million in sales tax revenue each year.
With no sales tax increase and no sales tax redistribution, the county is projecting double-digit property tax increases for the next five years. A sales tax increase to 4 percent could mean property tax cuts over the same period, along with regrowth of the fund balance, county officials have suggested.
Mr. Hidy said he would prefer a sales tax hike over a property tax hike because property taxes are mandatory, but individuals have some control over how much they pay in sales tax.
Once you increase the property tax, everybody has to pay it. You have no choice its there, Mr. Hidy said. As far as the sales tax goes, maybe you have to rethink what you purchase, maybe just curb your spending a little bit.
But Trustee Francis J. Carvel said raising the sales tax, as opposed to property tax, may not necessarily benefit members of the community.
Most people here are spending all their income, Mr. Carvel said. Everything you buy is taxable. The groceries themselves and your mortgage are just about the only things that are not taxable.
Trustee Timothy J. Ahlfeld said he needed additional information before he could vote on the proposal, noting that a property tax hike might be detrimental to local business.
If youre going to raise property taxes, thats going to have a huge effect on our major employer here a few of our major employers, he said.
I understand what they are trying to do, but what happens to that extra revenue? Is it just a means to address the issue they have right now? he asked. I need to figure out the whole puzzle. If we dont do this, what would an increase in property tax do to our industries?
Mr. Carvel also pointed out that a sales tax increase is only a temporary solution to budget shortfalls.
The counties that have raised the sales tax over a period of time theyre now at 8 or 9 percent theyre in trouble, Mr. Carvel said. The fact is five years from now, or 10 years, you will face the same thing again, and you cant raise (the sales tax) anymore.
A third option to balance the countys budget is to eliminate discretionary spending, which means cutting services that are not mandated by law.
The county already has explored ways to improve efficiency, such as combining job functions and eliminating unnecessary travel with county vehicles, Mr. Parker said. The county also has cut a variety of services, including a new-mothers program, a substance addiction program and a mental health program. The only way to cut spending even further is to eliminate county jobs, which does not fully alleviate costs because the county then has to pay for the laid-off workers unemployment benefits.
He said discussion about eliminating the sheriffs department road patrol drew strong opposition from county residents.
Mr. Hidy said he would invite legislators Jonathan S. Putney, Gregory M. Paquin and Anthony J. Arquiett to the next village board meeting.