The Wayne County Board of Supervisors began sharing sales tax with the local school districts back in 1968. At that time it was decided that 33-1/3% of the county’s sales tax revenue would be shared with the school districts, each paid on a quarterly basis, based on each district’s average daily student attendance.
The Supervisors revised this amount in 1991, by capping the amount shared with the schools at $5.4 million, where it has remained until now.
Recently discussions in the finance committee of the Board of Supervisors, the discussion about whether to continue sharing sales tax revenues with the schools were reinitiated.
At the Chamber meeting the issue was discussed by: Town Supervisors Bill Hammond of Macedon, Ken Miller of Palmyra and Bob Kelsch of Ontario, along with School Superintendant Bob Ike of Palmyra-Macedon and Assistant Superintendent for Business Ralph Brongo.
The Supervisors wanted to let the crowd know that, while the Supervisors from the western towns have been in favor of status quo, they but were not sure where the discussion with other Town supervisors. If it is decided that the tax revenues should be brought to a vote for a change or elimination of the sharing, a public hearing would need to be held. Supervisor Hammond suggested that, if the business owners at the Chamber felt strongly in support of keeping the revenue sharing, they ought to come out in force to lend their support at any public hearing.
Brongo provided a handout and tried to explain in layman’s terms the effect of a loss of this sales tax sharing to the schools.
He noted that through the Star Program, New York State pays a portion of the school tax bill for each qualifying residential property. The premise is that if schools lost County sales tax revenue and then raised school taxes by an amount to offset the loss of $5.4 million, STAR payments could increase by about $1.4 million.
The reality, according to Brongo, is that the State would not pick up the difference in State Aid, but in a best-case scenario would make additional STAR payments of approximately $1.4 million. That would leave the school districts having to raise new school taxes by $4 million, or cut that much from their budgets.
The position of the Superintendents and their school boards is that the loss of sales tax would force significant school tax increases. If these increases were passed on to the school budgets, the budgets would probably fail, and the district would be forced to cut programs. Also, if the budgets were defeated, then in assumes increased STAR payments would not materialize.
Also figuring into the issue, is Governor Cuomo’s proposed 2% property tax cap. This would make it impossible for the schools to make up for the lost sales tax from the County.
Brongo pointed out that the practice of sharing sales tax revenues with the school districts ensures that a portion of local education costs are paid by residents of other counties also, when they spend money in Wayne County. It unites also businesses and schools in a common cause to bring more business to Wayne County.
Brongo wound up the discussion by advising that, if the Towns and County kept all of the sales tax revenues, the assumption that they would use it to reduce the tax levies in the County or the individual towns, if not a given. Many towns might reconsider certain projects or equipment that they had been putting off, due to lack of adequate funds, and use the additional revenue for expenditures instead.
The supervisors indicated that there is not yet a resolution in front of the entire board to change the sales tax revenue sharing formula, but they anticipate the discussion will continue, and encourage the public to pay attention and get involved.