Double-digit drop in Westchester sales tax revenue

Westchester and Putnam counties had the largest year-to-year declines in local sales tax revenue in the state through the first seven months of 2009. They were among six counties statewide with double-digit drops in sales tax revenue through July.

Across the state, sales tax revenue through July was down $640 million, or 8.9 percent, compared to the same period last year. County sales taxes, which account for most of the tax revenue reaped outside New York City, declined by $291 million or 7.6 percent. Of the state”™s 57 counties, 53 experienced declining sales tax collections for the period.

That decline prompted state Comptroller Thomas P. DiNapoli to issue a warning to municipalities as retailers looked for a sales boost from back-to-school shoppers.

“Back-to-school shopping makes September a very important month for sales tax revenues,” DiNapoli said. “Local governments need to take a hard look at the September data. Just like the state, if local governments are not on track to meet their budgeted revenues for the year, they need to make adjustments in their spending now without placing a greater burden on local taxpayers.”

 

New York counties have increasingly relied on sales taxes as a revenue source. Sales taxes made up more than 27 percent of county revenue in 2007, up from 21 percent in 1997 and 24 percent in 2002, according to the comptroller”™s office. Except for the holiday season, September is the most important month for sales tax collections.

 

Through July, Westchester sales taxes were down nearly $33.9 million from last year, a 12.5 percent decline. Westchester had the state”™s third largest dollar decline in sales taxes, trailing only Suffolk County, with a $71 million drop, and Nassau County, where tax revenue was down $57 million from last year.
In Putnam County, sales taxes were down approximately $3.75 million or 12.8 percent through July, the largest percentage decrease in the state.

Other counties in the Hudson Valley region had smaller declines in sales tax revenue this year. Rockland County was down $3.5 million, or 3.6 percent. Orange County was down $5.9 million, or 4.6 percent. In Dutchess County, sales taxes were down $5.4 million through July, a 6.5 percent decrease from last year. Ulster County reported $5 million less in sales taxes, a 9 percent drop from last year.

In New York City, sales tax revenue was down 10 percent or $285 million through July. In the 20 cities including New York that impose their own sales tax, revenue was down 9.8 percent through July.
The slowdown in sales will lower revenue for many local governments too, as 45 counties distribute a portion of their sales tax to municipalities within their borders, the comptroller”™s office noted.

The statewide declines follow a year in which sales tax revenue grew only slightly. In 2008, collections were up 1 percent from 2007, the smallest growth rate since 1991, according to the comptroller”™s office.
The double-digit decrease in Westchester this year is the first year-to-year decline in county sales tax revenue in 18 years of reporting by the state.