What's Happening with Syracuse's Sales Tax Revenue?

MR- STAFF REPORTER RODNEY BROWN

Municipal officials in Syracuse are in a contentious debate regarding how sales tax revenue should be redistributed and shared among the city, county, towns and villages and school districts.

Government leaders must decide every ten years how to split up sales tax revenues on the basis of population and need.

When something is purchased from a store in Onondaga County there's an 8 percent sales tax. Half of the collected revenue goes to the state- the other half goes to the county. The county shares its percentage of revenues with the municipalities.

Onondaga County expects to receive $279 million in sales tax revenue. As it now stands, the sales tax revenue is divided in four ways- with Onondaga County taking 46 percent, Syracuse receiving 22 percent, towns and villages getting 25 percent and schools districts receiving 6 percent.

"There are 14 counties in New York State that don't share any of their sales tax at all," said James Rhinehart, chairman of Onondaga County's Sales Tax Committee. "I don't think Onondaga County will end up in that position but we certainly are going to look to retain more of the sales tax."

The Sales Tax Committee has the power to change the formula where school districts and municipalities would receive less money. If so, the move could force a certain degree of consolidation among local governments.

"There seems to be a growing consensus that there needs to be an incentive to consolidate," said Syracuse's Administration Director Ken Morkrzycki. "Perhaps that will be one of the proposals we'll hear about in the future."

Rhinehart has proposed a plan that would give the City of Syracuse $50 million annually and Onondaga County would receive $129 million. The Committee Chairman wants the remaining $100 million used towards the reduction of property taxes among the city's villages and towns a well as the City of Syracuse.

Syracuse's Mayor Stephanie Miner disagrees with the Chairman's proposal and called it "unacceptable."

The Mayor argued that, the proposal does not take the City's or the region's best interest into account. "Cutting the City's sales tax receipts by $19 million annually will have a devastating impact on the services the City is able to provide to its top employers and will cripple economic development in the entire region," She said. "Even before factoring in these reductions, the City has been forced to reduce its personnel by almost 100 positions, including police officers."

Miner also noted- the City has been forced to raise taxes by 5.4 percent and increase water rates by 9 percent in lieu of a current budget shortfall.

"A vibrant and growing City is essential to a healthy County and this proposal will stifle any opportunity for growth," the Mayor said. "As this process continues, the City will be exploring all of its options for receiving its fair share of tax revenues."

Onondaga County school districts are also very concern about the redistribution process.

The Sales Tax Committee is exploring three options including, eliminating the school's share of sales tax entirely, reducing it, or phasing it out over three years.

"In Onondaga County last year the school districts taxed property owners for over $500 million," Chairman Rhinehart said. "The county property tax is only $180 million- at some point enough is enough."

Schools currently receive six cents out of every sales tax dollar collected by Onondaga County.

Legislators have proposed to discontinue the schools districts share of the sales tax revenue. If eliminated, school districts in Onondaga County could lose an estimated $16 million. The school district was forced earlier in the year to take a $50 million cut in state aid. After taking the cut- the School Boards Association announced it could force districts to cut close to 800 school administrators, staff and teachers.

"Any other business that would consider being in Central New York wants to know are good schools available for their kids and the sales tax money helps protect the districts from making further cuts at this time," said Larry Cummings of the Central New York School Boards Association.

The committee is seeking to come up with a new sales tax distribution formula by May 1.