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Sales Tax Situation
Remains Complicated

By Nathan Mayberg
MONTICELLO — May 9, 2006 – Yesterday, the Sullivan County Legislature approved the forwarding of a resolution to both the New York State Assembly and the New York State Senate requesting a .5 percent increase in the county sales tax to a total of 8 percent.
But there are still no signs from the state representatives for the county that it will pass.
The sales tax increase is an integral piece of the county’s budget. Without it, said county officials, there is a shortfall of more than $3 million in revenue which would have to be made up immediately through the cutting of programs.
New York State Assemblywoman Aileen Gunther, New York State Senator John Bonacic and the Association of Town Supervisors are all currently against the sales tax increase.
But the county resolution passed 5-1-1 with Legislature Chairman Chris Cunningham, Minority Leader Rodney Gaebel, Ron Hiatt, Vice Chairman Jonathan Rouis and Elwin Wood all in support.
Legislator Jodi Goodman voted against the measure, while Leni Binder abstained.
Missing from the meeting were legislators Kathy LaBuda and Sam Wohl, who both voted against the sales tax hike in January.
Gunther said yesterday that she had nothing new to report but suggested a meeting between her, the Legislature and Bonacic might be in order. She appeared concerned with the previous opposition of both LaBuda and Wohl, as well as the current opposition of Goodman and the abstention by Binder. In addition, she cited the opposition of the Association of Supervisors as another problem.
“They [may] need to go back to the drawing board,” she said of the county.
Langdon Chapman, Bonacic’s assistant, said the senator was awaiting a list from the county on what programs would be cut if the sales tax hike was not approved. He has not received that list yet.
Gaebel stated that he supported the initiative last year as an alternative to an 8 or 9 percent property tax increase – which would be more damaging to county residents, he said. The sales tax hike allowed the county to raise the property tax 3.8 percent.
He pointed to unforeseen increases such as fuel and new voting machines (to be used next year) that led to the increase in this year’s budget. Gaebel added that only one person spoke out publicly against the county’s budget during public hearings last year.
Hiatt stated that a sales tax increase was a needed revenue enhancement to replace the landfill, which the county used to operate for revenue while actually running the county a deficit. In addition, the sales tax increase only brought the county in line with surrounding counties. In Orange County for example, the sales tax rate is 8.125 percent.
Last year, the county came to terms with several unions representing governmental employees on retroactive raises and future raises. Meanwhile, the county has been locked into binding arbitration with the Sullivan County Sheriff’s Department. Hiatt said that department deserved raises to bring them up to parity with other county departments, as well as fellow police departments.
He called for a public meeting with the Association of Supervisors to discuss what the county needs to cut in case the state does not approve the sales tax hike. He said the county’s own meetings on the proposed cuts should be fully open to the public. Those sentiments were seconded by Binder and agreed to by Cunningham.
The Association of Supervisors, led by Town of Lumberland Supervisor John LiGreci, is also requesting a mechanism for revenue sharing amongst the towns from the sales tax.
Cunningham said he would agree to hold discussions on that possibility for the 2007 budget process. But, he added, the towns should also take into account the services the county provides to the towns at no charge. Gaebel also stated that discussions for revenue sharing in the 2007 budget should take place.
Binder abstained but indicated that she favors the sales tax over the property tax hike. Representing the Town of Fallsburg, which has the highest amount of tax-exempt properties from Sullivan County Community College to the prisons and religiously owned properties, she said the sales tax was one of the few ways to gain revenue from the people that live or work there. In addition, she said the failure of the room tax bill and the closing of two hotels also made the necessity for a sales tax hike that much higher.
Budget Chairman and Financial Management Committee Chairman Jonathan Rouis said that this week’s Financial Management Committee meeting would be put off until next week, when the Legislature can discuss proposals on what departments will need to be cut, in case the sales tax hike is not approved.
Currently, the county is preparing proposals on cuts to departments and on restructuring the pay scales of employees.
LiGreci was in attendance and said the association is 100 percent against the sales tax increase. He said some towns are already averaging 8 percent tax increases and that this would further hurt their residents.
“You can’t keep raising taxes every year. Sometimes you need smaller government and you have to tighten your belt,” he said. “You can’t just keep hitting them over the head with taxes.”

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