Joseph Spector

Wires

As municipalities deal with a property-tax cap and growing costs, sales-tax revenue — their top money source — increased only 1.2 percent in January through March compared with the same period in 2013.

"We are concerned because many counties are relying more and more on sales-tax revenues to help pay for local quality-of-life services and also to support state programs," said Mark Alger, the Steuben County manager and president of the state Association of Counties.

Sales tax is the top revenue source for local governments, surpassing even property taxes. The revenue has rebounded in recent years after it dipped significantly during the recession in 2008 and 2009.

Most counties charge a 4 percent sales tax on the purchase of goods and services, while the state charges its own 4 percent.

The sales-tax figures from the state Department of Taxation and Finance showed a lag statewide because in early 2013 purchases soared after Superstorm Sandy hit the downstate region in late 2012. For example, sales-tax revenue dropped 12.4 percent in Nassau County, which was heavily damaged after Sandy.

Similarly, sales-tax revenue increased in the Southern Tier in 2012 after tropical storms Lee and Irene in 2011 as residents replaced damaged items.

Also, the bad winter weather this year may have slowed sales, state and local officials said.

State officials said they predicted a slowdown in the final quarter of the 2013-14 fiscal year, which ended in March 31. The state in the last fiscal year met its estimate of a 5 percent growth in sales-tax revenue and predicts growth of 3 percent in the current year.

"Our forecast anticipated this dynamic, which is attributable to non-recurring Sandy spending last year and this year's rough winter. We still ended the fiscal year with a surplus that exceeded expectations," said Morris Peters, a spokesman for the state budget division.

The state Association of Counties said sales-tax revenue hasn't bounced back fully since the recession.

From 1990 through 2007, sales-tax growth averaged about 4 percent a year. But from 2008 through 2013, the average growth was about 1.65 percent, the group said.

"This is not just a county problem. About 25 percent of county sales-tax receipts are shared with other local governments to help support their operations," said Association of Counties Executive Director Stephen J. Acquario.

Sales-tax revenue dipped the most in Ulster County during the first quarter. But the decline was largely due to a fight at the Capitol over renewing the county's sales-tax rate of 4 percent.

The rate dropped to 3 percent late last year and wasn't restored to 4 percent until February, said County Executive Mike Hein. The county lost about $5 million over the flap and balanced the books by using reserve funds.

"We should never lose sight of the fact that these dollars relate to services," Hein said.

Sales-tax revenue fell 8.2 percent for the quarter in Broome County, the third most in the state. Sales-tax collections were down nearly 1 percent in Chemung County.

The revenue increased 2.3 percent in Monroe County; 2 percent in Dutchess and Erie counties; and 1.2 percent in Westchester and Tompkins counties.

Broome County has seen two consecutive quarters of more than an 8 percent decline in sales-tax revenue, said county budget director Marie Kalka.

She said high unemployment, the end of federal unemployment benefits for some and the slowdown in natural-gas drilling in neighboring Pennsylvania are all likely contributors to the slide. The Binghamton area had 100 fewer private-sector jobs in March than it did in a year ago, the state Labor Department said Thursday.

"Our hope is that we will see our county rebound over the next few quarters," Kalka said in an email.

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