Get to the Meeting Room

Posted by & filed under CGR Staff.

The Brooks sales tax solution is headed to a courtroom.

But perhaps where it ought to be is in a meeting room.

You know the court story by now. Monroe County Executive Maggie Brooks announced a two-part sales tax solution to a projected county budget shortfall. First, the county would embrace a trade-off with the state, giving up sales tax proceeds to New York while also giving up the local share of Medicaid. This is called the “sales tax intercept.” The second part would be a sales tax increase of three-quarters of a penny.

But then Monroe County filed a lawsuit designed to iron out an early issue with the trade-off. Local leaders questioned whether the sales tax intercept would be legal since Monroe County has a sharing arrangement for the sales tax that is written into state law. A hearing is scheduled for June 23.

While Monroe County seeks clarity in the courts, Ontario County announced last week that it had come to resolution on a sales tax increase of its own.

It took them two years to hammer it out.

And this wrangling came from a county with plenty of sales tax wiggle room. (Ontario County has among the lowest sales tax rates in the state – at 7 percent). And the ultimate increase was less than what is on the table in Monroe County –just an eighth of a penny.

Ontario County officials took the long road to reaching agreement with the local municipal leaders over not just the increase but the sharing arrangement for that tax. They did it around a table.

The county, city, town, village and school officials in Monroe County should begin their own negotiations around a table. Even as they wait for a court ruling.

Goodness knows there is plenty to get out on that table.

The lawsuit filed by the county points this out. County officials in the suit say the state did not obligate counties to make whole municipalities who might lose out on sales tax receipts should a county enact the intercept.

Some town leaders saw this language as a threat and worried about whether the county would go through with an intercept even if it doesn’t get a sales tax increase. (Check out Ron Nesbitt of Webster as an example.)County Executive Maggie Brooks has repeatedly said that she would not do this – that a sales tax intercept only comes with an increase so that municipalities can be held harmless.

Consistent negotiations could, perhaps, smooth out that disconnect.

There are plenty of other potential bones-of-contention that municipal leaders could discuss around a table. Here’s just a couple:

—Just why does the sales tax increase need to be linked with the intercept? Couldn’t negotiations begin on an increase first? It’s the business community that will need to see the worth of such a proposal, and if the governments aren’t even in agreement on how to divide up the proceeds how can that sales job even begin?

—Should the talk focus on more than just the revenue side? In other words, should these governments start earnest talks on broad-ranging collaborative cost reduction efforts? An argument remains out there that Monroe County hasn’t explored enough government spending cuts or efficiencies. But why should local governments and school districts be left out of the equation? Shouldn’t there be some real acknowledgement that if revenue streams are shared, so too should the pain of cutting?

—Should the Morin-Ryan sharing plan be revisited? This sharing arrangement benefits the city and other municipalities by the county giving up more of the sales tax than any other county in New York—and sharing the proceeds not just with the general purpose governments but with the school districts, too. This is written into state law. Should this be part of the community debate?

Maybe the courtroom was necessary to this process of getting a sales tax solution accepted or rejected.

But it will be the meeting room – with people inside it – where the work will ultimately get done.

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