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St. Lawrence County supervisors blast sales tax option

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CANTON — Town supervisors and village mayors were quick Thursday to criticize an option St. Lawrence County legislators may consider that would reduce the amount of sales tax they receive.

Faced with a tax increase of up to 18.5 percent, county Administrator Karen M. St. Hilaire is asking legislators to think about keeping half a percent of the sales tax it distributes to towns and villages under a formula based 50 percent on population and 50 percent on assessed value. Retaining the money would raise about $7 million for the county and take a lot of the pressure off budget deliberations but it would also take a big bite out of town and village budgets.

The county has shared sales tax with towns and villages since 1965, Brasher Supervisor M. James Dawson said.

“It’s been a tradition all that time and the towns have built that into our budgets,” he said. “Taking that away would just be shifting the burden. It’s a shifting of responsibility. The towns do not have responsibility for the county budget.”

Mr. Dawson and other municipal leaders said they understand the county’s dilemma, faced with mandated services, late payments from the state, a property tax cap, and reluctance on the part of the county’s state senators to introduce legislation that would allow an increase in the sales tax.

“I sympathize with the county. I know the hole they’re in is not entirely of their making,” Potsdam Supervisor Marie C. Regan said. “I’m not pointing the finger but this would be a big hit. We’re just hoping there’s another way because it will drastically affect our budget.”

Withholding $7 million from towns and villages could mean tax increases at the lower level of government.

“It’s a tough situation for everybody,” Mr. Dawson said. “We’ll both go down together.”

Ms. St. Hilaire, however, pointed to fund balances reported for last year by municipalities in the county that by-and-large show the coffers are fuller than recommended by the state comptroller’s office.

“Generally, local governments should aim for an unrestricted fund balance of between 5 percent and 15 percent of total expenditures,” spokesman Brian M. Butry said. “Each situation is different. What’s excessive for one municipality may not be for another.”

The county expects to end this year with a fund balance somewhere between $800,000 and $2 million on a $236 million budget.

Towns that reported fund balances higher than 15 percent of their appropriations included Brasher, Colton, DeKalb, DePeyster, Fine, Fowler, Gouverneur, Hammond, Hopkinton, Lawrence, Lisbon, Louisville, Macomb, Madrid, Massena, Morristown, Oswegatchie, Parishville, Pitcairn, Potsdam, Russell, Stockholm and Waddington.

Villages with fund balances above 15 percent included Rennselaer Falls, Richville, Gouverneur, Hammond, Hermon, Morristown, Heuvelton and Waddington.

Figures for some municipalities, including the towns of Hermon and Rossie, the villages of Canton, Norwood and Potsdam, and the city of Ogdensburg were not available, probably because they did not file reports on time with the comptroller’s office, Mr. Butry said.

Some municipalities had hefty fund balances, such as Brasher, which had $1.44 million — 68.2 percent of its budget — and Potsdam, which had a balance of $4.5 million, 135 percent of its budget, but those were built up for planned expenditures.

In Brasher’s case, the fund balance includes money for its revolving loan fund, $800,000 in tribal compact funds the town is saving for a garage and $300,000 intended for sewage sludge removal, Mr. Dawson said.

Many towns prefer a comfortable cushion because their budgets are relatively small, so the percentage recommended by the comptroller’s office is insufficient to deal with emergencies and unexpected costs, he said.

In Potsdam’s case, part of its fund balance is for capital projects, such as $1.8 million for its new town hall and $600,000 for rehabilitation of its former home, Mrs. Regan said. Other purchases could come from the reserves, including a $200,000 loader.

“We’ve got a healthy fund balance. I don’t deny that,” she said. “We were told 10 to 15 percent is good. I think that’s a little bit too lean.”

The village of Hermon’s fund balance of $207,096 is 78.73 percent of its budget but some of that money will be spent soon as paving for about $60,000 is being completed, Mayor Cathy L. Race said.

The town of Canton is among those whose fund balance — at $175,196 — is low at 6.72 percent of its budget.

“I don’t think we can get much leaner,” Supervisor David T. Button said. “A loss of income coupled with the same kind of increases the county is facing would put us in a difficult position.”

The village of Massena also has a small fund balance of $1.9 million, 12.2 percent of its budget. Losing $600,000 in sales tax if the county went ahead would be devastating, Mayor James F. Hidy said.

“Legally, we’d certainly have to look into it further,” he said. “Because it’s been a tradition for so long, we feel we should continue to get it.”

The sales tax question will be among the agenda items discussed at the county Mayors Association meeting at 6 p.m. Thursday at Massena Country Club. The county Supervisors Association will take up the question at its meeting at 6 p.m. Thursday at the Best Western/University Inn in Canton.

“We have no say in the decision but I’m sure they’re going to hear from us,” Mrs. Regan said.

Shifting tax burdens does not solve the problem, Morristown Mayor Cheryl A. Shatraw said.

“It’s a Catch-22, no matter how you look at it,” she said. “People are getting nailed enough. If we cut and cut and cut, you’re driving people out.”

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