Legislature Split Over Extending Sales Tax by One Percent
Putnam County legislators are divided over the prospect of extending the county’s 1 percent sales tax increase for an additional two years
During a full legislature meeting on Wednesday night, legislators passed a resolution to ask permission from New York State to extend Putnam County’s increased 1 percent sales tax, which accounts for approximately $12 million in revenue for the county. Many legislators, however, disapproved of the extension, noting that Putnam already has a higher sales tax than any of its neighboring counties, with a rate of nine percent.
District 9 Legislator Kevin Wright proposed a sales tax rate increase of three-fourths of a percent as opposed to one percent, stating that the high tax rate sends a negative message to the business community, especially because the county does not share the revenue generated by the tax with municipalities on a regular basis.
While other legislators agreed that a lower sales tax might be beneficial, they argued that keeping the rate increase at 1 percent is the best way to generate money for the county and noted that if it is lowered to three-fourths of a percent, the county would need to find another way to make up for the $3 million loss. District 3 Legislator Toni Addonizio noted that other taxes would need to be increased to make up the difference.
“People are paying high enough taxes as it is,” she argued.
Wright countered by stating that a lower sales tax rate may lead to an increase in consumer spending, which would close the deficit without the need to raise taxes.
“I suspect that we might not suffer as big an impact. I’m not prepared to say we wouldn’t suffer any impact but…I think the business community would stand behind you and say ‘we’ll do better for you with sales tax revenues as a whole if we have less sales tax burdens’,” said Wright.
District 6 Legislator Roger Gross agreed with Wright’s philosophy but argued that the county is already taking a loss on taxes from fuel, which has seen a sharp price reduction over the last two months. He argued that the economy is not yet healthy enough to sustain a decrease in the sales tax rate.
District 7 Legislator, Joe Castellano noted that even though the resolution passed, it only grants permission to extend the tax rate increase and that the legislature, along with the audit committee, can explore ways of achieving a lower tax rate, decreasing spending, and finding alternative sources of revenue.
“I hope we can work together to reduce spending so we can lower the sales tax because the sales tax is an impediment to economic development,” said district 8 Legislator Dini LoBue. “I hope this will open up a very serious dialogue between the legislature and the public.”
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