Sales tax hike considered as budget crunch remedy

QUEENSBURY Aiming at relieving a looming budget shortfall, Warren County supervisors are now considering the possibility of raising the sales tax rate from 7 percent to 8 percent. A sales tax increase could raise $16 million in new revenue that could help pay for ever-increasing county government expenses, several supervisors contended at an April 9 meeting of the county supervisors Finance Committee. County Budget officer Kevin Geraghty said Monday that he thought a 1 percent increase in sales tax was a way to raise new revenue to pay for existing county programs, services and obligations while avoiding a 13 percent to 20 percent hike in property taxes this next year. Soaring fuel costs, reduced state aid, a sluggish economy and increased state mandates have been main factors in the countys financial squeeze, he said. Lake Luzerne Supervisor Eugene Merlino said that charging a higher sales tax would shift a substantial portion of the tax burden onto visitors and away from property owners. Countering objections that an 8 percent tax was excessive, Merlino passed out a survey showing that 82 percent of all 62 counties or boroughs in the state charge 8 percent sales tax or higher, and only 8 percent of the counties charge as low as 7 percent like Warren County does. The heavy influx of visitors in Warren County means tourists would be paying the bulk of the $16 million in new tax revenue towards county expenses, rather than property owners, he said. We have a tremendous number of visitors, he said. And a one-percent increase is a minor amount that generates big rewards. Geraghty and Merlino said they were aware of the argument that sales taxes are regressive, or pinch those with modest incomes more than the wealthy. But Merlino countered that a sales tax provides residents with the choice of cutting their tax bite by reducing their spending, while property taxes give you no such choice. Both Merlino and Geraghty said theyd favor an increase in sales tax only if the extra revenue were dedicated to specific necessities, like road maintenance, debt reduction, and funding for the new social services building. Geraghty suggested the one-percent hike expire in four years. Merlino suggested that $2 million of the anticipated extra $16 million would be dedicated for rebates to the town governments to help their respective residents tax burden. But Merlino, an owner of a bed and breakfast, said he supported cutting the existing bed tax in half, from 4 percent to 2, which would cut county revenue by $1.5 million. Geraghty said regardless of what supervisors decide to do with sales tax rates, county residents had to downsize their expectations from government to keep taxes from continuing to increase over the coming years. Stony Creek Supervisor Frank Thomas said Tuesday that he was not in favor of the proposal to increase sales tax. We havent done enough yet to cut the rate of spending by county government, he said.

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