St. Lawrence County businesses are split in their positions over a the potential for a 1 percent increase in the countys 3 percent sales tax.
Sellers of big-ticket items like cars say they are largely opposed and smaller retailers land either in favor of the idea or express apathy.
The county Legislature is faced with the possibility of a 19 percent property tax increase in order to fill a $9.3 million gap in its approximately $260 million budget. A sales tax increase is being billed as a possible means to refill the countys coffers.
I am looking at that as a revenue source that would generate about $14 million, said County Administrator Karen M. St. Hilaire. That would go a long to solve the $9.3 million gap.
Before the county could increase the rate, however, the State Legislature would have to pass a home rule bill. So far it has not been taken up in the Senate.
Some view the countys desire to raise the sales tax rate as a means to generate revenue without having too great an impact on residents.
Lynn L. Blevins, owner of Blevins Bros. Chrysler and Dodge dealer in Ogdensburg, said raising sales tax might mean that non-residents will help generate revenue for the county, but the impact on local businesses would be harmful.
The countys relatively low sales taxes is really our only advantage, said Mr. Blevins. He says out-of-county shoppers may be discouraged by a higher rate.
The county is among a few in the state which have not raised the sales tax above the 3 percent maximum allowed under state law.
Effect On Pricing
Gregory M. Carbino, owner of Carbinos Jewelry Store, Ogdensburg, said the proposal could have a significant impact on Canadian traffic.
With Canadian money at par, theyre flocking over here, he said. Were getting this influx of people because of the lower tax rate.
Patrick J. Peets, who owns Peets Jewelers in Massena, said he is against the move.
We sell a lot of high-ticket items, and with the economy the way it is and the price of gold the way it is, prices are already higher than normal and now they want to add another one percent, he said. Thats going to add more to the retail, and well have to cut into our margins even more because people arent going to want to pay that price.
Mr. Peets said he understands the countys situation, but he feels there are other steps that can be taken before increasing the sales tax.
They need to look at cuts instead of raising costs and adding more burden to St. Lawrence County residents, he said.
St. Lawrence Centre Marketing Manager Ronald J. Patnode also said he was opposed to the move, although it would likely hurt the malls tenants more than the mall itself.
We, as a mall, are a landlord, so we dont pay sales tax, he said. Its up to the retailer. They obviously have to charge and collect sales tax.
He said he didnt think increasing the sales tax is a good move.
From my point of view, we get a lot of Canadians and people from neighboring counties where the sales tax is higher, and we do have increased trade because of that, he said. Do I think it will have an impact? I think it will.
Mr. Patnode said there was a reason the state used to hold tax-free weeks, and that was because people enjoyed not paying sales tax.
This might help the countys finances, but at the end of the day I dont think its beneficial to the countys retailers, he said.
Car Dealer Opposition
Mike Sarkin, president of Maple City Auto Center, Ogdensburg, said the sales tax hike would crucify car buyers.
Thats fine for buying a coat or a pair of shoes, he said. But on big-ticket items it really increases the cost.
Mr. Sarkin said a 1 percent sales tax increase could translate to an extra $10 on a car buyers monthly bill.
Real Frenchie Coupal, who owns and operates three car dealerships in Massena, said he is also opposed to the move, citing the impact it will have on some of his customers.
It will have some impact, but people will still drive, he said.
He said the extra 1 percent in sales tax when financed over a five-year period would be mean a car payment that is a few dollars more per month.
Who this is going to hurt it is the little guy who cant afford the extra dollar, he said. It really multiplies and thats going to hurt the little guy. We cant forget about the little guy.
Retailers arent the only ones who would be impacted by the increase.
Obviously any tax increase significantly impacts us because of our size, said Alcoa spokeswoman Laurie A. Marr.
She said based on last years spending, a 1 percent sales tax increase would be an additional $105,000 in expenses for Alcoas Massena operations.
She said a 20 percent property tax increase would cost the company even more.
A 20 percent property tax increase would be hundreds of thousands of dollars based on what they pay now, she said.
Property Tax Vs. Sales Tax
Michele R. Scanlin prefers a 1 percent sale tax hike to seeing a large increase in the property taxes she pays for her home and the building she owns at 81 Main St., Canton.
She doesnt expect the extra percentage point would deter customers from buying wedding gowns and other formal wear at her shop, Sposa Bella.
Were the only county in the area thats not at 8 percent, Mrs. Scanlin said. Unlike property taxes, a purchase is optional.
The countys total sales tax, including the states 4 percent tax, is 7 percent.
She said increasing sales tax would also generate more revenue from people living outside the county who spend money here.
A 1 percent increase is only $1 for every $100 spent, Mrs. Scanlin said. Its low impact, and it would be spread among people both in the county and from outside the county.
Phil A. Vivlamore, who owns the Sears franchise in Potsdam, said he doesnt think a 1 percent increase would have much of an impact on his business either, and hes strongly in favor of such a move.
I think it should have been done a year ago, he said. I think they should spread the burden across all of the people in the county and not just those who own property.
Charles J. Merriman, presdent of Merrimans in Norwood,said he doesnt really have a strong opinion on the issue.
I can see both sides of it, he said. One percent isnt really enough to get peoples attention, and the county needs the money.
When asked if he felt St. Lawrence County had an advantage because of its lower sales tax, he said he wasnt sure how many people outside the county were aware that the tax here was lower.
I think the county might get some people who shop here, because its lower, but I dont think anyone has ever really advertised it, he said.
As for how the move would impact his business, he said he doesnt think it really would.
People will still shop local to buy their lumber and building supplies, he said.
Staff writer Susan Mende contributed to this report.