ELIZABETHTOWN - In an ongoing search for ways to fund its major capital projects, the Essex County Board of Supervisors began discussion on a new tax on real estate transfers.
During the Jan. 20 meeting of the board's finance committee, County Manager Dan Palmer suggested the tax as a way to offset the cost of an ongoing emergency radio communication system project.
Currently the state collects tax on real estate transfers at a rate of four dollars per thousand. Palmer proposed a new tax at the county level that would equal the state's.
He estimated the new tax would bring in an additional $1.2 million for the county, based on the transfer tax revenues collected by the state from Essex County in 2008.
Palmer even suggested including verbiage that would designate the transfer tax revenues as a funding source for capital projects.
"There's some value to say to the taxpayers that, yes, we're raising the transfer tax, but that money is going to be used for bond payments," said Palmer.
County Clerk Joseph Provoncha said a higher transfer tax wouldn't have much of a negative effect on the local real estate market since sellers are traditionally responsible for paying the tax.
"I don't think it's going to affect people's (decision) whether they buy or sell property," granted supervisor Roby Politi (R-North Elba). He expressed concern, however, that matching the state's transfer tax would put Essex County's among the highest in the state.
Politi suggested the board consider a smaller increase that would set the county's transfer tax at just half the amount collected by the state.
Others present, such as Dan Connell (D-Westport) and Robert Dedrick (R-Ticonderoga) echoed Politi's sentiments.
"I think [$2 per thousand] makes more sense," said Dedrick.
County Attorney Dan Manning clarified, stating that such a proposal was technically not a tax increase, but rather an additional tax, and that the county would need to pass a local law to enact it.
Palmer conceded that half the amount would still be a reasonable source of revenue, but emphasized the importance of adding the transfer tax.
"I do think it's a way to [avoid increasing] the property tax," he said.
The committee ultimately agreed on a resolution to add a property transfer tax at a rate of $2 per thousand. The resolution will have to be approved at future board meetings before the process begins enacting the tax as law.