Extends the expiration of the authorization of county of Chautauqua to impose additional 1/2% sales and use taxes until November 30, 2017; authorizes such county to increase the rate of such taxes to 1%, if county real property taxes are reduced by 3%.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7557A
SPONSOR: Goodell TITLE OF BILL: An act to amend the tax law, in relation to extending
the expiration of and amending the provisions authorizing the county of
Chautauqua to impose additional sales and compensating use taxes
PURPOSE: The purpose of bill is to authorize the Chautauqua County
legislature to impose an additional 1% sales tax,'from the period Decem-
ber 1, 2015 until November 30, 2017, provided that a portion of such
sales tax increase is used to reduce real property taxes within the
County.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 amends section 1210 of the tax law to extend the existing
authority for Chautauqua County to extend the existing 1/2 percent addi-
tional sales tax for an additional two year period, in the event that
the County does not enact a full 1% additional tax rate.
Sections 2 amends section 1210 of the tax law to provide authorization
for enactment of a 1% rate under Section 1210 of the tax law for the
periods p December 1, 2015- November 30, 2016 and for the periods Decem-
ber 1, 2015-November 30, 2016.
Section 3 and 4 amends section 1224 of the tax law to further authorize
the imposition of the 1% additional tax. - Section 5 amends section
1224 of the tax law to further continue the existing authorization to
impose the additional 1% sales tax.
Section 6 amends section 1262-o of the tax law to continue the distrib-
ution of the 1/2% sales tax revenue as previously-specified should the
County fail to enact the additional 1 % sales tax.
Section 7 amends section 1262-o of the tax law to provide that should
Chautauqua County enact the additional 1% sales tax; the County shall
allocate 3/20 of the net collections of the additional 1% additional tax
to the cities, towns, and villages in the county on the basis of their
respective populations. Subsequently the County shall distribute. the
remainder to pay for the County's Medicaid and other expenses required
by law; to pay for local and bridge projects; to pay for capital
projects and capital project debts not paid by the MRT; and to deposit
into a reserve fund for bonded indebtedness. This is the same propor-
tional distribution as previously specified for the ;1 additional sales
tax.
Section 7-a provides for the disposition of sales tax revenue for the
period December 1, 2016 - November 30, 2017 should the County fail to
meet the conditions imposed for extending the 1% additional sales tax
reduction for the 2017 tax year.
Section 8 provides that the authority to impose the additional one
percent sales tax for both the 2016 tax year and the 2017 tax year is
conditional upon the County budget resulting in a real property tax levy
which is a minimum of 3% less than the County's 2015 real property tax
levy.
Section 8-a provides that the county must mail the required notice that
they have enacted the 1% sales tax by November 1, 2015 and November
1,2016, respectively, for each tax year.
Section 9- imposes an immediate effective date with certain qualifying
section repeals, and certain notice requirement.
JUSTIFICATION: Chautauqua County has requested the imposition of an
additional 1% sales tax pursuant to a resolution passed by the County
legislature on March 25, 2015. In the resolution the County cites the
need to increase their sales tax due to the fact that the County has
been suffering a revenue decline since 2006 when the County had their
additional sales tax rate reduced from 1.25% to .5% In addition to the
reduction in the prior additional sales tax rate, the County has cited
the cost of the "hold harmless" requirement of the residential energy
exemption (currently $4 million per year) coupled with increases in
mandated expenses, such as Medicaid (increased 13% in 10 years) and
public safety (13% increase in 10 years) as causing the county to
consistently dip into their fund balance to keep the property tax levy
in check. Without the requested legislation, the County's fund balance
will have dropped from $29 million to at the end of 2007 to a projected
fund balance of $5.7 million at the end of 2016, which is less than 1/2
the level of fund balance required by the State Comptroller.
The County has implemented cost savings measures which include reducing
the size of county government by 270 employees in the last 5 years,
reductions in employees' benefits and social services, and privatization
of the county nursing home. Even factoring these substantial cuts, the
County's independent deficit reduction commission has concluded that any
further reductions in non- mandated services would constitute extreme
measures and affect the Chautauqua County's quality of life. The County
is one of the two counties in Western NY with a sales tax rate currently
less than 8%.
The 1% tax increase will result in an anticipate $7.78 million more per
year than the current .5% tax rate. The legislation provides that the
imposition of the additional tax rate is conditional upon the County's
adoption of a real property tax reduction of at least 3% from the 2015
tax levy, so that real property taxpayers will see a reduced tax rate in
2016, and no further increase in 2017.
LEGISLATIVE HISTORY: New Bill.
FISCAL IMPLICATIONS: None.
EFFECTIVE DATE: This act shall take effect immediately,subject to
provisions.
