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The question of whether sales tax revenue is allocated appropriately among Chemung County, the City of Elmira, and the county’s towns and villages has been discussed extensively over the past year.

Widespread interest about this issue is primarily driven by three factors: (1) the current sales tax agreement is set to expire in two months; (2) this November’s election features an unprecedented number of candidates for local office, many of whom have analyzed the current plan and offered opinions about ways to improve it; and (3) numerous municipal leaders have been outspoken about the plan’s negative effects on their entity’s fiscal health.

I set forth some of the recent statements by municipal leaders about the impact of the sales tax plan in a post last August, found here, and have restated them below:

*In 2016, Town of Horseheads Supervisor Mike Edwards attributed the town’s new tax levy directly to the sales tax plan, as shown here.

*Southport Town Supervisor David Sheen – named by Sheriff Chris Moss, a candidate for Chemung County Executive, to serve as deputy if Moss is elected – announced the town’s plans for infrastructure projects and buildings are on hold, and Southport taxes will likely go up in coming years as a direct result of the way sales tax revenue is distributed, as shown here.

*The Town of Chemung laid off its entire highway department earlier this year, a move Chemung Town Supervisor George Richter stated was made necessary in part because of the lack of sales tax revenue, shown here. Supervisor Richter also wrote a Star Gazette Op-Ed last week in which he stated that the Town of Chemung is looking to significantly increase its tax rate because of a looming fiscal crisis tied to the current sales tax plan, shown here.

*Elmira Mayor Dan Mandell, along with Elmira Manager Mike Collins, has been adamant that despite offsets from shared service agreements with the county, the sales tax plan has had a significant negative impact on the city’s finances, as shown here.

*The Town of Veteran Board held a budget meeting in early December where the possibility of a tax increase for 2019 of up to 133% (!) was discussed, due in large part to the same problem – its revenue stream has been diminished. Minutes from the budget meeting were not kept, but this information has been confirmed Anthony Pucci, a candidate for legislator in the 1st District, who was present.

At a time when Chemung County officials continue to boast about going 14 years without a tax increase, and at the same time insist all municipalities aside from the City of Elmira and possibly the Village of Elmira Heights are on solid financial footing and in good fiscal health, it is imperative that we try to fairly and objectively understand what impact, if any, the county’s decision to strip revenue from its towns and villages has had not only on local governments, but also on the population that matters most – taxpayers.

This is the only way we will be able to discover the optimal way to negotiate a new sales tax agreement and move our community forward in a unified way.

The Town of Elmira is on New York’s “Fiscal Stress” list

The Town of Elmira, where I live, has also been negatively impacted by the sales tax plan.

This blog post should not be read as a criticism of Town of Elmira Supervisor Dave Sullivan or the town board members. To the contrary, the information below shows Sullivan – named by Mike Krusen, a candidate for Chemung County Executive, as his choice for deputy – has been forthcoming about problems he anticipated since the plan’s inception, and he and the board members have worked hard to find creative ways, such as shared service arrangements, to provide adequate services as the town’s revenue stream decreased significantly.

Despite these efforts, a press release sent yesterday by New York Comptroller Tom DiNapoli, found here, and reported by the Binghampton Press and Sun Bulletin here, shows that the Town of Elmira, along with Broome County, were the only two local governments in the Southern Tier included on the 2017 “Fiscal Stress” list.

According to DiNapoli:

“Fewer local governments are considered fiscally stressed, but those with persistent financial problems are struggling to stay out of the red and fix their problems. While the results may be encouraging in some areas, there are municipalities that should focus on near-term financial risks and implement more prudent long-term planning.”

DiNapoli’s full report, found here, includes a chart that shows only 2.5% of reporting municipalities in New York (or 34 out of 1,464) are in or at risk of fiscal stress:

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Town of Elmira finances prior to implementation of the sales tax plan

The important questions we must ask are these: how and why did the Town of Elmira land on this list?

Prior to the implementation of the sales tax plan in 2015, the Town of Elmira, like many other municipalities in Chemung County, was fairly flush with money. The economic spillover from fracking in Pennsylvania’s Northern Tier led to a rapid rise in sales tax monies for nearly all local governments, resulting in large, arguably bloated, reserves.

In order to provide tax relief to the residents of the Town of Elmira, Sullivan and the board reduced the town’s tax levy significantly between 2012 and 2014. To make up the budget gap, they spent reserves down by 35 percent, from a high of $2,563,951 as of January 1, 2012 to $1,658,876 as of December 31, 2014. A full accounting of the town’s finances during that that period is found here.

2014 press conference in Wisner Park

However, just as Sullivan and many other local municipal leaders were attempting to spend down their reserves in order to provide relief to taxpayers, county officials announced their plan to cut off a substantial part of the revenue stream flowing to the municipalities by changing way sales tax is allocated. By this time New York’s fracking moratorium had been established and gas drilling in Pennsylvania had slowed considerably, leading county officials to worry that sales tax revenue would drop dramatically.

On October 8, 2014, an organization called RAMS (the Rural Association of Mayors and Supervisors) held a press conference in downtown Elmira’s Wisner Park, where its members urged Chemung County Executive Tom Santulli to cancel the sales tax plan altogether before the scheduled implementation date in January, 2015.

At the conference, Sullivan criticized the county’s rationale for taking sales revenue from the towns and villages. Arguing that the decline in sales tax revenue countywide had not been nearly as bad as expected, and that the Town of Elmira and other municipalities had followed the county’s directive to spend down reserves by reducing their tax levies and using fund balance monies to cover operating expenses, Sullivan said:

“Since 2010, we’ve made a concerted effort to reduce our tax levy, and we’ve used sales tax revenue and fund balances to do that…

…[a]nd that’s not just our case. I know that others are doing the best job they can with using these resources to put the money back in the community and reduce taxes for the citizens.

So, in our case, we’ve kind (of) been doing what they’re advocating, but yet we’re all being painted with this broad brush that we have too much of this, we have too much of that, and we’re sitting on the money and not putting it to work. On behalf of our town board, I take exception to that.”

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Audits by the Comptroller’s Office

Despite the concerns raised by Sullivan and other RAMS members, the sales tax plan was implemented early in 2015.

Roughly a year later, following an audit by the Comptroller’s Office, the Town of Elmira landed on the “Fiscal Stress” list for the first time – and has been one of only a handful of municipalities across New York to remain on it ever since.

A primary reason for the fiscal stress designation set forth in the audit, found here, and in described by the Star Gazette here and in the clip below, is the Town of Elmira’s continued reliance on reserves to covering operating expenses.


“Fiscal Stress” scores of Chemung County municipalities

According to the Comptroller’s Office in a flyer found here, all municipalities in New York that submit data are given a fiscal stress score based on number of different financial indicators including things such as year-end fund balance, operating deficits/surpluses and cash position.

Any municipality with a score of 45 or greater is deemed to be in or at risk of fiscal stress. A review of Chemung County’s municipalities from a graph found here shows the Town of Elmira is the only local municipality named on this list over the past three years:


What do Town of Elmira officials say about their financial situation?

This is a tough question to answer.

A review of the town’s Board Meeting minutes from the past year reveals they remain concerned about spending down reserves beyond an acceptable level, and that they feel the sales tax plan is at least partially to blame.


Excerpt from the 12-17-17 Board Minutes


Excerpt from the 7-16-18 Board Minutes

I attended a Town of Elmira Budget Workshop on September 10, 2018, where Sullivan and the board members shared many observations about the current state of town finances going forward over the next few years.

The preliminary 2019 budget projected the town’s fund balance would drop from 24% this year to just 13% in 2020, down from a recent high of 62% in 2016, and showed the potential for a tax increase in 2019 as high as 7%:

draft budget

A copy of the Town of Elmira’s preliminary budget with my handwritten notes

These figures are clearly subject to change as the budget process is fluid, but one thing stood out: Sullivan and the board members agreed they were hopeful the county will change the sales tax plan prior to finalization of their budget in order for the increased revenue to provide some relief.

A municipality on solid financial footing and good fiscal health? A town that has not been negatively impacted by the sales tax plan? It sure didn’t sound like it to me.

Unfortunately I am unable to to back up what was said at the workshop with minutes, as the town has not posted anything from the meeting even though it occurred almost two and a half weeks ago.

More troubling, a follow-up public Budget Workshop was apparently held on September 24th, yet no notice of the meeting was provided to the community as shown below on the town’s current Agenda list and Calendar, found here and here:



As I have reiterated in numerous posts, matters like this illustrate why a Council of Governments makes so much sense. Figuring out how to redesign the sales tax plan requires input from representatives of all layers of local government. We have a real opportunity to make the kind of changes many people have been after for years, but getting it right requires genuine cooperation and all of the facts.

Christina Sonsire