With that question toward the end of Wednesday night’s Batavia Town Board meeting, Lewiston Road resident Bill Sutton triggered a 15-minute discussion with Town Supervisor Gregory Post about sales and property taxes, and New York’s tax cap.
Sutton, (photo at right), a truck driver for Kistner Concrete, said he noticed that the meeting agenda included a resolution calling for an override of the New York State tax cap – the limit on the amount of real property taxes that may be levied by the town as it prepares its 2022 budget.
He said he was concerned that property taxes will increase and thought that bumping up the sales tax from 8 to 8.25 percent could be a way to prevent that from happening.
Pointing out that Erie County’s sales tax is at 8.75 percent, Sutton said he wondered if the extra ¼ percent in sales tax could be put in the town’s budget “so that citizens in the town don’t have to pay higher property tax.”
“Why can’t we benefit from that? Why can’t the Town of Batavia implement a little more sales tax to compensate for this, instead of property owners and businesses picking up the slack?” he asked.
TWO SALES TAX JURISDICTIONS
In his response, Town Supervisor Gregory Post said he appreciated Sutton’s questions and went on to explain that towns or villages do not have the authority to impose sales tax.
“There are two entities that are eligible to collect sales tax. One is Genesee County and one is the City of Batavia,” Post responded. “Traditionally, over the last 20 or 30 years, there has been a collaboration between those two entities to allow the county to collect all of the sales tax and then distribute 50 percent of those revenues collected or some portion of that 50 percent to the communities on an ad valorem basis.
“Which means that communities will get a percentage of the sales taxes collected by Genesee County – whether it’s 8 percent or 8 ¼ or 8 ½ or 8 ¾. Those are distributed based on the communities’ assessed valuation – taxable assessed valuation.”
Post mentioned the agreement between Genesee County and the City of Batavia that provides the city with a minimum of 14 percent share of all the sales tax revenue generated in the county. That agreement also benefits the county’s towns and villages which, by virtue of a revision last month, will share $10 million in sales tax revenue annually for the next 38 years.
Per that agreement, the Town of Batavia’s assessed value qualifies it for about 16 percent of that amount – the actual figure is $1,687,937 – and that is substantially more than the other municipalities. The Town of Darien, site of Six Flags Darien Lake, is next at $970,992, followed by the Town of Le Roy at $822,260.
The supervisor explained that the town is supported by sales taxes “and the sales tax revenues have traditionally been twice what the property tax collection levy was.”
“So, for every dollar collected in property taxes, we have been benefited by a dollar and a half to two dollars in sales tax revenues already,” he said. “And that sales tax is paid by (in part) by citizens not living in the Town of Batavia …”
'LOOKING DOWN THE ROAD'
Sutton said that satisfied that part of his question, but added that he is “looking down the road (because) here we are today – we have a shortfall.”
He continued on his point that many people from outside the town come to the town to shop, and that the town should benefit more from having to deal with extra traffic and for having many “employment opportunities.”
“There has to be something we can do as a town to increase sales tax,” he said. “There has to be something that we can go forward doing this to make it even more beneficial to live in the town – to bring a business in from outside.”
Post replied by asking him to consider, “How much benefit does Genesee County get by having a lower sales tax rate to attract shoppers from counties that have a higher sales tax rate?”
“We have spent a lot of time looking at the consequence; right now, we’re an attractive site for equipment sales, heavy equipment. We just had a groundbreaking this week (LandPro),” Post offered.
“I’m looking at the larger scale sales of automobiles and heavy equipment, and if you’re selling a million dollar bulldozer and you’re selling it because your sales tax are 8 percent instead of 8 ¾ percent, and they’re buying it and taking delivery here, we’re getting the benefit of some of those revenues that we wouldn’t get if our sales tax rate was the same as it was in another county.”
Sutton said if Genesee County went to 8.25 percent it still would be lower than Erie County (but more than Monroe County, which also is at 8 percent).
Post offered to continue the debate with Sutton, inviting him to attend a weekly (Wednesday at 5 p.m.) board workshop.
“I am happy to hear your perspective and your comments … and I’m happy to see the participation,” the supervisor said.
Sutton acknowledged that he doesn’t have access to all the dollar amounts, but pressed on with his view that the Town of Batavia has a quality of living that other communities don’t have, especially an abundance of shopping locations.
“Why can’t be benefit from this so that our children, grandchildren and great-grandchildren will also have that benefit going forward?” he asked. “We will prevent the shortfall by adding the .25 percent sales tax across the board to make it fair for not only the residences and the businesses – for everybody – to keep the property tax down that will draw business in from the outside and everybody will contribute.”
'NO OBLIGATION TO SHARE'
Post then brought up the fact that Genesee County has “absolutely no obligation to share one dime of sales tax revenue with any community.”
“They are entitled to keep 100 percent of it and it is only through the strict negotiations over the last 20 years by this board and our predecessors to come to some rational agreement where the county gets what they need to sustain their operation and not defer maintenance, and the communities in the county are benefited by the apportionment of sales taxes that they are,” he explained.
He then said he believes that Genesee County probably distributes more in sales tax to its towns and villages than another other county in New York State.
“There might be one or two other counties that do a better job with sales tax distribution than Genesee County, but locally they take 10 million dollars in revenue they collect in sales tax and they give it back to the towns to subsidize town and village operations to maintain a lower (property) tax rate.”
Post then went back to the resolution to override the state property tax cap, calling it “a statement that our community has been strategic and has been looking down the road five, 10 and 15 years financially, and retained by these resolutions annually the ability to manage our assets and modify our cash flow to meet the needs of our community so that we’re not bound and restricted by New York State and prevented from maintaining infrastructure that is key to being an attractive community to developers both international site selectors and local developers.”
The board set a public hearing on the tax cap override for 7 p.m. Oct. 20 at the Batavia Town Hall, 3833 West Main St. Rd.
Post thanked Sutton for sharing his thoughts, adding that he is “part of this community and your job as a citizen is to participate.”
Following the meeting, Post said that although it is early in the 2022 budget process, he does not expect the town’s property tax rate to increase.
The 2021 tax rate was set at $2.85 per thousand of assessed value, meaning that a home assessed at $100,000, for example, would pay $285 in town taxes for the year. The town also imposes a fire district tax, which was $2.34 per thousand this year.
Photo by Mike Pettinella.
