October 18, 2021

Cortland County to switch sales tax use

Cortland County legislators will vote Sept. 24 on whether to amend a resolution establishing how the county uses the $1.5 million it takes off the top in sales tax revenue before the rest is distributed among the county and municipalities.

It’s a move that got no opposition Tuesday at the Budget and Finance Committee or later from Homer Village Mayor Darren “Hal” McCabe, who has been a staunch advocate in the past about making sure the county uses the funds appropriately. McCabe said he talked to Legislature Chairman Paul Heider (R-Cuyler, Solon, Truxton) and that he supports amending the resolution if it didn’t go beyond three years.

“I am very aware of the fiscal challenges that Cortland County faces, they are the same challenges we face here in the village of Homer: How to provide the same level of services to our residents with a drastically reduced revenue stream,” McCabe said in an email statement. “So I was in support of redirecting some of the sales tax revenue for up to three years to help close budget gaps, but beyond that point I can’t support it, especially not at the increased percentage into unrestricted fund balance, as that truly is a tax increase on village residents.”

The new resolution would amend the one passed in 2018 that divided the $1.5 million three ways: $1 million to a jail reserve fund, $200,000 to pay off a bond for the emergency communication towers and $300,000 for debt reduction.

The new resolution would break up the $1.5 million so that $1 million would go directly into county coffers, $300,000 to a reserve account for county building repairs and $200,000 to pay off the emergency communications tower bond.

However, the resolution does not specify an end date after three years.

Corpora had previously told legislators that the county was looking at a $2 million loss in sales tax revenue it got $17.4 million in 2019 — and an estimated $3.4 million loss in state aid, about 20%.

“This resolution to direct a certain portion of future sales tax receipts into the general fund as opposed to the jail reserve fund is, I believe, a responsible step to address our impending fiscal crisis brought about by the COVID pandemic,” said Legislator Cathy Bischoff (D-Cortland) in an emailed statement after the meeting. “It is one of many steps we may take to limit, to the degree possible, the negative effects of this urgent fiscal situation upon our county services, staff and taxpayer.”

Legislator Kelly Preston (R-Homer) said 2020 has caused the county to rethink how it spends off-the-top sales tax.

“Our inmate numbers at the jail have decreased to half of what they were in 2018,” Preston said in an email after the meeting. “Covid 19 stressed out our local economy and taxpayers. We must rethink the idea and have access to the million dollars for county purposes.”

McCabe said the county is going to have to make tough choices moving forward.

“In order to close the gap, the county is going to have to cut staff dramatically as well as revisit some of the services they provide, just as we are doing here in the village,” McCabe said. “We all need to tighten our belts, but after the third year is behind us, I will not be supportive of the county tightening our belts here for us.”