Updegrove Talks: 2020 Sales Tax Revenue, Predicted Rates Down the Road, Amount Lost to State from Interceptions

Wake Up Niagara on WLVL hosted Niagara County Manager Rick Updegrove Monday morning for an update on tax revenue and the impacts of such a challenging year for county government.   “We’ve been confronted by some significant budgetary challenges as a result of this pandemic.  Sales tax, probably the most obvious,” he remarked on the morning broadcast. 

Despite rough waters since April’s shutdown, Updegrove expects the upcoming county reevaluation of the county sales tax to leave residents with a rate between 4 and 6 percent.  He added, “Now, I know that doesn’t seem nearly as high as we had initially expected.”  According to Updegrove, a strong January through March helped fortify the county’s budget during this crisis, “January through March of this year, we were up over 12% in our sales tax revenue.  In fact, March was up 16% year-over-year.”

The year’s strong start didn’t solve every problem, Updegrove explained, adding that being 32% down in April and 29% down in May on sales tax revenue required more action to overcome.  “We furloughed about 200 employees back sometime in May.  So, I had a conversation with the Budget Director about that.  He’s indicated that he believes the net saving is in excess of half a million dollars.”  In addition, many positions left empty from resignation or retirement have yet to be filled. 

Updegrove then switched to the larger image, lamenting concerns with the state government’s “interception” of county sales tax, acting as another hurdle to vault.  Furthermore, referencing a letter to the Governor’s Office from the New York State Association of Counties.  In the letter, certain actions are suggested to be taken by the state to alleviate some of the pressures.  Emphasizing certain parts, Updegrove stated, “Now, two of the things that they have suggested are pretty obvious:

  • “End the diversion of county sales tax for purposes of AIM related payments to towns and villages.  The state can provide counties the option to make AIM related payments to downstream governments if the county chooses to do so.”
  • “End the diversion of county sales tax to support distressed healthcare facilities.  These funds have been made available through Federal Coronavirus Assistance.”

If action isn’t taken by the state to alleviate these interceptions, Updegrove explained the reality for next year, “In 2021, the expectation is that 1.3 million dollars will be intercepted for healthcare facilities from county sales tax revenue.  While 606,000 dollars will be intercepted for AIM related payments to towns and villages.”  He added, “We’re going to have about 2 million dollars intercepted in county sales tax revenue in our 2021 budget.  We expect the entire amount of sales tax revenue lost from COVID to be somewhere in the 2 to 4.3-million-dollar range.  This one act alone comes close to affecting our sales tax revenues as much as the pandemic.”