County legislators five-year plan to use a proposed sales tax increase to restore the county fund balance and lower property taxes gained support from most of the City Council.
If state legislators approve home rule legislation, St. Lawrence County would be able to raise its sales tax from 3 to 4 percent; under the current plan, the city would be asked to keep its current 6.4 percent share of the sales tax receipts.
When people hear about any sort of tax increase, the immediate assumption is that government will just spend it right away, said Philip A. Cosmo, Ogdensburg comptroller. It is clear with this plan that the intent is not to do that.
With a sales tax increase and if the city agreed to its current share and the towns and villages received 10 percent of the increase the county tax levy could drop 14.3 percent in 2014. The 2013 county tax levy increase was 14.4 percent.
Under a 2009 agreement with the city, the county keeps half of what it collects in sales tax and distributes what is left to towns and villages after the city takes its cut. The county is proposing to change the percentage distributed to towns and villages, but only of the proposed sales tax increase.
Legislator Frederick S. Morrill, D-DeKalb, chairman of the committee that drafted the plan, said raising the sales tax would help fix an imbalance in county revenue.
In 2012, we received 72 percent of our (tax) revenue from property taxes and only 28 percent from the sales tax, he said. Based on our assumptions, with the sales tax increase we would receive 58 percent of our revenue from property taxes. It just seems much more fair.
Mr. Morrill said, based on the countys assumptions, if Ogdensburgs percentage stayed the same, it could reap more than $4,716,000 in additional sales tax revenues over the next five years. If the county successfully raises the sales tax, Ogdensburgs 2014 receipts would increase by $916,000, enabling the city to lower its property tax levy 19.9 percent from a 2013 level of $4,604,457.
Mayor William D. Nelson said the city should mimic the countys five-year projections.
Id like to see us put together a five-year plan, he said. We could take that plan and show to the taxpayers what were going to do with their money.
While supporting the tax increase, Councilwoman Jennifer Stevenson expressed some reservations.
I would ask that we not raise sales tax on utilities and necessities, she said. Things like gasoline and heating fuel, I dont think we can ask our taxpayers to pay more for those items.
Councilman William D. Hosmer said the plan ignored the cause of the north countrys fiscal woes.
I see nothing here that reins in expenditures or acknowledges the need for mandate relief, he said. I am in favor of a sales tax increase, but only if we give the money back to the people.
Karen M. St. Hilaire, St. Lawrence County administrator, said the plan awaits the citys agreement and sponsorship in the state Senate.
If we had approval to move forward, and if Senator (Patricia A.) Ritchie moved this forward, it would probably be approved in three to six months, she said. The earliest well see any revenue from this is late fall.
City officials said it might not be in Ogdensburgs best interest to put all of its additional revenue towards lowering property taxes, suggesting some of the money go to restore Ogdensburgs fund balance, which has been depleted in recent years as the council has tried to keep property taxes low.
Looking at what the county put together, the major selling point is that this is going to be used to create a fund balance, Mr. Cosmo said.
The countys additional revenue would not be allocated for additional expenditures, Mr. Morrill said.
Every nickle will lower property tax or build up the fund balance, he said.
The proposal already has gained support from the St. Lawrence County Chamber of Commerce.