Sales-Tax Revenue Shows Modest Gains In 2012

1:09 AM, Jan 15, 2013   |    comments
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By Joseph Spector, Albany Bureau Chief

ALBANY -- Sales-tax revenue for state and local governments grew 2.1 percent in 2012, a modest gain compared to 2011, state records show.

For the critical fourth quarter that included Christmas, sales-tax revenue grew 1.4 percent in 2012 compared to 2011, data from the state Taxation and Finance department show.

Total sales-tax revenue for the state and municipalities increased $525 million in 2012, from $24.9 billion to $25.4 billion.

WEB EXTRA: Click here to read the sales-tax figures by county for the last quarter and for the 2012 year

"The numbers were so large in 2011 that that rate of growth really declined" in 2012, said Joseph Mareane, the county administrator in Tompkins County, which saw sales-tax revenue increased 2.2 percent for the year.

Some counties said the growth in sales-tax collections were below expectations. Chemung County Executive Thomas Santulli said the county ended 2012 about $3.3 million short of what they had budgeted.

The county's sales-tax revenue fell 1.84 percent between 2012 and 2011, the worst drop off in the state and one of only four counties to have negative growth. The others were Essex, Schuyler and Schoharie -- all small rural counties.

Chemung County, located on the Pennsylvania border, had for several years led the state in sales-tax growth because of natural-gas drilling across the border. Declining demand for natural gas and the closure last month of a Sikorsky Aircraft Corp. plant has hurt the county, Santulli said.

"What a difference a year and a half makes," Santulli said. "We went from leading the state in sales-tax growth and room-tax growth, and we missed our sales-tax budget number by $3.3 million" this year.

Sales-tax revenue is the largest revenue source for counties, more than property-tax revenue. In New York, most counties charge an 8 percent sales tax. The state gets 4 percent, and local governments get the rest.

Sales-tax revenue had been a significant upswing for counties in recent years after it plummeted during the recession. In 2011, sales-tax revenue grew 5.4 percent compared to 2010.

But a weak economy slowed the growth in 2012. In 2012, sales-tax revenue was up 3.3 percent for local governments and up 0.7 percent for the state share.

Putnam County Executive MaryEllen O'Dell said the sales-tax revenue met the county's projections, which state data showed growing by nearly 3.7 percent or $1.8 million.

But O'Dell said growing cost for pensions and health care is eating up the additional money. The two costs are set to increase by about $3 million this year.

"We like to see that positive trend, but at the same time our mandate trend" nearly doubled the sales-tax increase, she said.

Broome County was among the top performers in sales-tax growth in 2012, up 8 percent. Dutchess County grew by 1.7 percent, Monroe County grew by 3.5 percent, Westchester by 2 percent and Rockland by 0.7 percent, according to the state records.

Monroe County Finance Director Scott Adair said the county budgeted for a sales-tax increase of 1 percent, but are pleased that sales were able to beat projections.

"It's a pleasant surprise for our sharing partners in these challenging times," Adair said. The county, like many others, shares portions of their sales-tax revenue with local municipalities.

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