Thursday, August 2, 2007

Checks, Balances and DEBT

The continuing pursuit of an answer that won't devastate small business and citizens.

The Warren County Board of Supervisor’s Ad-Hoc Sales Tax Committee met yesterday and the ARCC was the only organization in attendance. The ARCC has sent one of our professional staff members to each of these committee meetings since they began several months ago. The goal was to monitor the work of the committee and to ensure that our opposition to an increase in the sales tax was voiced consistently.

The ARCC has long opposed an increase in the sales tax as it will increase the cost of doing business in Warren County and will not guarantee a decrease in the property tax. The ARCC continues to argue that the only way to control NY’s extraordinarily high tax burden is to control the amount of money government can raise in the first place. Yesterday, the committee of Supervisors recommended that discussion of whether or not to increase Warren County’s sales tax by 1 percent be the focus of a special Board meeting in September.

In advocating for the 1 percent increase in the sales tax, Lake Luzerne Supervisor Gene Merlino offered a suggestion as to how the County could use the $14 million that such an increase will raise annually in an attempt to reduce property taxes. His suggestion included the following: $7 million for property tax relief; $2 million set aside to pay mortgage for health and human services building; $1 million each for the County road department, Sherriff’s department, and a surplus fund. He also suggested that the County reduce the bed tax from 4% to 2% and use $1.5 million from the increased sales tax to fund county tourism operations now supported by the bed tax. His recommendation also set aside $500,000 from the sales tax increase for Glens Falls to use for East Field and the Civic Center. The increase in the sales tax and these mandated uses would be subject to a sunset clause after five years meaning that if the funds were not spent to reduce property taxes that the sales tax increase would be eliminated after 5 years.

Supervisors Nick Caimano, Bill Kenny and Fred Champagne were vocal in their opposition to an increase in the County’s sales tax. One supervisor noted that he had heard from officials in Washington County and indicated that they had told him that they were prepared to follow whatever lead was taken by the Warren County Board. If this information is correct, this means that the success of the ARCC’s opposition to an increase in the sales tax in Warren County may also help Washington County businesses to avoid the costs associated with an increase in the County’s sales tax as well.

Besides wanting to control the spending appetite of government, the ARCC recently released a report it created that documents the fact that many small businesses (those who lease space) as well as households who rent will pay more in taxes if the sales tax is increased even if the property tax is decreased. The report noted that all small businesses typically spend money on equipment, supplies, and other business oriented purchases that are subject to the sales tax and as such their costs will rise if an increase is approved. The ARCC will continue to monitor the work of the committee and will notify members as soon as a special meeting is called.