CANTON — St. Lawrence County’s sales tax retuns are up for the latest quarter but only because of a 1 percent hike in the local share approved last year.
Meanwhile, bleak sales tax returns for Jefferson County predict another difficult budget season, where some painful adjustments may have to be made.
Lewis was the beneficiary of both a rate hike and a strong boost in sales. Franklin County officials said they are still reviewing their final numbers for the latest quarter.
Sales tax receipts in St. Lawrence County were disappointing in the first quarter of 2014, when they showed a dip of 2.87 percent after County Treasurer Kevin M. Felt converted the figures to what they would have been under the 3 percent rate. Through the second quarter, the $27,665,000 in sales tax received is down 1.75 percent.
“It’s better than it was,” Mr. Felt said. “Is that a trend where it’s rebuilding? I don’t know.”
Mr. Felt said he had no explanation for why people were not buying as much as they had in the past but the effect on the county budget could be significant.
County legislators for 2014 budgeted a 1 percent increase in sales tax revenue. Converted to 4 percent, that would mean they expected $58.5 million but they are on track to receive $57.5 million. “It could be a million dollar drop,” Mr. Felt said.
There could be some offsets that improve the county’s financial problems, including $500,000 more than expected in funding from a tobacco settlement, he said.
Mr. Felt said he will recommend the county borrow $10 million in September to meet cash flow as it did this year.
“I have no choice,” he said. “When the fund balance is low and the retirement bill is high, you end up borrowing.”
The county’s pension bill to the state is around $7.5 million, which Mr. Felt said is expected to decline in future years.
“Hopefully, it drops fast,” he said.
“Just say no, that’s our new slogan,” said Scott A. Gray, R-Watertown, chairman of the Jefferson County Board of Legislators Finance and Rules Committee.
Mr. Gray wrote to legislators Friday, telling them that based on the county’s first and second quarter collections, he was forecasting a shortfall between $800,000 and $1.2 million.
“This puts tremendous pressure on our current working budget in order to minimize use of fund balance,” Mr. Gray wrote.
The last time the county raised its sales tax rate was in 2004, when the rate was increased by 25 percent to 3.75 percent. That increase benefitted the county for several years before revenues began stalling out in the fourth quarter of 2012.
In April, Mr. Gray actually forecasted a $1.5 million budget shortfall, a figure that has contracted a bit thanks to slightly better returns over the first two quarters of 2014.
“They still are not going to be enough to turn it around,” Mr. Gray said.
Jefferson County would have to make substantial gains of more than 6 percent in each of the next two quarters just to make budget, Mr. Gray told legislators.
In lieu of those stronger returns, the county has few options: raise taxes, spend fund balance or make cuts.
With raising taxes representing the least favorable option, especially in light of the state’s 2 percent tax capand the county’s auditor repeatedly warning it against spending fund balance, which is ideally maintained only for emergency situations, reducing spending in some fashion is the preferred course of action, according to Mr. Gray.
Ahead of budget talks, which generally begin in the fall, the county administrator’s office will have to look at ways to bring the county’s expenses in under budget, Mr. Gray said.
County Administrator Robert F. Hagemann III could not be reached for comment Monday.
“We’re going to have to show some restraint,” Mr. Gray said. “We can’t approve any additional spending unless it’s paid for some other way.”
The news is much more positive in Lewis County, where second-quarter receipts jumped from $2.6 million last year to $3 million this year, a 15.3 percent jump.
While part of that was due to a local sales tax rate hike from 3.75 percent to 4 percent on Dec. 1, receipts would have still increased to $2.8 million without the rate change.
At the midway point of the year, the county has already collected about $770,000 more than at this point last year.
“I’m pleasantly surprised,” Lewis County Legislature Chairman Michael A. Tabolt, R-Croghan, said. “I would hope that’s an indicator that the economy is showing some signs of improvement for Lewis County.”
Mr. Tabolt noted that the most recent unemployment figures were also positive for his county but wasn’t completed sure about reasons for the large increase.
“I’ll just take it and be pleased with it,” he said.
County Manager Elizabeth Swearingin said that tourism may have been a factor. However, she has asked officials from the New York State Association of Counties if there would be data available to better pinpoint the reasons.
Staff writers Daniel Flatley and Steve Virkler contributed to this story.