Local Leaders Call On State To Reverse Local Sales Tax Diversion

Press Release: NYS Association of Counties, NYS County Executives’ Association, NY Association of Towns, and New York Conference of Mayors

As State Lawmakers continue negotiating final terms of the 2022 State Budget, which is due to take effect on April 1st, the state’s local government leaders are calling on their state representatives to reverse a recent local sales tax diversion law that is taking over $59 million a year from communities across the state. Sales tax is the primary source of local revenues for more than half of all counties and is a vital resource for municipalities, as counties share about 25 percent of their local sales tax with towns, cities, villages and school districts to help reduce pressure on property taxes and to ensure the delivery of local services. In 2019, local governments shared $2 billion in local sales tax revenues. 

NYSAC President Jack Marren, Chairman of the Ontario County Board of Supervisors said, “Strong local governments make for a stronger state, and as New York recovers from the economic devastation wrought by the coronavirus pandemic, it is imperative that those of us who have been serving on the front lines of responding to the crisis be provided with the resources and the flexibility we need for a full recovery. Now is the time for the state to invest in our communities with state resources, not diverting locally generated revenue for the state’s policies and programs.”   

NYSCEA President Marcus Molinaro, Dutchess County Executive said, “The state’s unprecedented diversion of hundreds of million of dollars in local revenue to pay for state programs is a regressive and counterproductive strategy that makes it harder for local governments to recover from the pandemic and rebuild strong communities. Local sales tax is the primary source of revenues for more than half of all counties and our number-one tool to reduce pressure on property taxes. New York’s local governments are just beginning to recover from the economic devastation caused by the coronavirus pandemic and we need every tool in the tool box to rebuild strong. The state needs to end this counterproductive practice of diverting local sales taxes, and allow these revenues to remain in the communities where they’re generated and needed most.”   

AOT Executive Director Gerry Geist on behalf of the Association of Towns of the State of New York said, “The Association of Towns strongly supports restoring AIM to a state funded general revenue sharing program. The current paradigm where towns receive AIM related payments funded by county sales tax is akin to taking money out of one hand to pay the other and is disadvantageous to all levels of local government. Reestablishing a strong state-local partnership will be for the benefit of all New York.”  

Richard C. David, Mayor of the City of Binghamton and NYCOM President said, “Intercepting local sales tax revenue to fund the state’s AIM program makes no sense. Under this structure, the villages and towns who receive AIM-related payments are essentially paying for their own state aid. This irresponsible policy represents the state shirking its financial obligations and shifting them onto local property taxpayers. We urge the State Legislature to put an end to this unreasonable practice of diverting funds intended for local governments to help balance the state budget.”