The impact of Chemung County’s 2013 decision to redirect sales tax revenue from the City of Elmira and other municipalities into its own coffers is proving to be an integral part of the discussion of how to address the City’s dire fiscal situation, as well the impact being felt by local towns and villages.
In 2013 the Chemung County Legislature voted to approve a controversial measure called the “Chemung County Financial Restructuring Plan” to redistribute the way sales tax revenue is allocated in Chemung County.
Prior to 2013, Chemung County received 50% of all sales tax revenue, and the remainder was split among the City of Elmira and the remaining local towns and villages. However, the redistribution plan allowed an increasing percentage of the money collected through sales tax to go to Chemung County, with a equal reduction in revenue left for the other municipalities.
The restructuring plan changed that ratio drastically, particularly in relation to the City of Elmira. Indeed, the split for 2017 directs approximately 70% of all sales tax revenue to Chemung County with only about 10% left for the City.
There was significant opposition to the sales tax redistribution plan in 2013 by the City of Elmira as well as a group of local leaders called the Rural Association of Mayors and Supervisors (“RAMS”.) Together they argued that taking sales tax revenue would cause local municipalities to raise taxes, cut services – or both.
Last December the City of Elmira announced it was proposing a 17% increase in property taxes in order to address its budget crisis, highlighted by a $2,500,000 budget shortfall.
This type of economic stress is not isolated to the City of Elmira. Both the Village and Town of Horseheads levied taxes in 2017 for the first time in more than 30 years, the Village of Van Etten voted last month to dissolve, and most other local municipalities face critical decisions of how to continue to cope with dwindling resources.
Despite these financial woes, Chemung County has not raised taxes in 13 years.
Today the Star Gazette reported that the Center for Governmental Research (CGR), an entity hired in 2017 by Chemung County to review the impact of the 2013 sales tax redistribution, has issued a report (article found here.)
The article quoted Chemung County Executive Tom Santilli as stating, “The fiscal health of the county is for the most part good. The villages of Horseheads and Elmira Heights are starting to feel the pain. Elmira has hit the iceberg and the ship is going down.” According to Santulli, any losses felt by the City of Elmira and other municipalities are offset by revenues gained through shared services agreements.
However, the article also quoted Elmira Mayor Dan Mandell, who strongly opposed those conclusions.
“From 2014 to 2018, our share of sales tax went from 12.33 percent to 9.05 percent. Our actual loss, according to our chamberlain, is about $5.1 million in sales tax revenue,” Mandell said. “The bottom line is, shared services do not offset our loss. We do save money, but for the county executive to go on a tirade about it is unacceptable and immature, but typical.”
“Our sales tax numbers aren’t deceitful. They are what they are,” Mandell continued. “Shared services save us money, but the impact of (loss of) sales tax revenue hurts us.”
The bottom line is that the City of Elmira’s economic health is integral to the prosperity of Chemung County. Elmira is the County seat, the home of our downtown, and the place with the most potential for economic development.
And, its problems are not going away anytime soon. We need to come together as a community – not the County separate and apart from the City – in order to discover real solutions while we still have the chance to bring about meaningful change.
[…] Day post cited above, I have discussed this issue in detail in blog posts shown here, here, here, here, here, here, here and here and in an Op-Ed to the Star Gazette, shown […]Loading...
I wonder if they are looking at the same numbers?
Without full disclosure by both parties regarding their calculations and how they arrived at them, I am not sure who is right.
In any case, the financial problems of the City of Elmira are still here. It does not help to show a public display of anger.
The county’s executive tone was, in my view, over the top, but I share and understand his frustrations in dealing with the city. However if the sales tax redistribution is actually hurting the city, they should have a second look at their system.
On the other side, the city still needs to cut their budget. They can’t continue to operate with an inflated number of employees based on historic staffing levels. At this point, they are demanding that taxpayers pay more taxes only to continue to support current staffing numbers and pension obligations, while at the same time keeping or expanding their deficit. There are plenty of areas to trim in the budget, the time to act is now.Loading...
Not one member of RAMS approached me to vote no. The only Supervisor to speak up was Town of Chemung Supervisor George Richter. The rest sat on their hands.Loading...
SID that’s not true AT ALL. I spoke with you and you know it. Your unwavering suppprt to the executives of the county legislature befuddleds me.
This was a unilateral countywide decision. As the then chair of RAMS we highlighted publicly the outcome to the City and again to all municipality. We sent every legislator a letter signed by every municipal supervisor in the county.
YOU were the only one that actually questioned county leadership. The city legislators were not interested in supporting the city. All municipalities were in better financial health and the county knew it.
Economic development has only occurred in the Horseheads/Big Flats corridor and Chemung due to the City assigning it’s EDZ to those projects. The city was left out of development and millions of sales tax dollars in the county coffers is due to the sharing of those EDZ from the city.
I remind everyone just because the county corned the city and offered “help” the city with shared services and enlarging their heath care participants (thereby lowering their costs with more participants), city residents are still paying those costs to the county. Shared is shared not free. It doesn’t take the city’s responsibility to pay nor does it burden other towns or villages to pay for the city shared services either. These shared services saved some money. Certainly not enough to save it from future tax increases that it was never an expected outcome.
If CGR had been hired by the City the tone of the report would have reflected a different attitude towards the county and I suspect it would cast a negative tone on the county actions. Its all in who is paying the bill for the study.
Honestly Sid. The first time you ever questioned Santulli /Krusen the GOP, led by them, didn’t get you reelected and put their efforts against you.Loading...
Sue, I never received your letter, that I recall. When it came my turn to vote I hesitated for a moment & then voted yea. Not one member of RAMS contacted me. I broke my Cardinal rule to leave the tax split as it was. My opponent Ken Miller (who won by nine votes) told folks that I voted to end the tax split to the muncipallities. I was also very pro Elmira and still am. This infighting is doing more harm than good. I have always felt that the County had & still does have the best intererests of Elmira at heart. Keep in touch I value your opinions & friendship.Loading...