Another Taxing Situation

Monroe County has yet another sales tax complication on its hands

This one over gasoline.

The State Legislature has approved capping the sales tax on fuel as an answer to the gripe by motorists about higher gas costs. Gov. George Pataki sounded like he was ready to support it.

The state proposal also allows counties to cap the amount collected in sales tax on gas. The problem is…can counties afford it? The answers are all over the map.

For example, how often is it that you’ll see Democrats and Conservatives getting on the same side? The Democrat and Chronicle reported that the minority Democratic caucus in the County Legislature wants to cap the gas tax.

That puts them on the same side as state Conservatives who are calling on local governments to follow suit. State Conservative Party Leader Mike Long says that New York has reaped a windfall at the expense of local motorists.

But does Long really mean the county executives of New York – like Maggie Brooks? This is a county that has announced a budget shortfall for the next two years that will reach $102 million. It’s looking at raising the local share of the sales tax to bridge that gap.

Brooks spokesman Larry Staub said the county doesn’t expect to see much of a windfall.

?”Most consumers have a fixed amount of discretionary income at their disposal,” Staub wrote in a written reply. “If they are spending more at the gas pump, they are most likely spending less on other items to afford the higher gas prices.”

Staub said that Brooks is taking a wait-and-see approach to this issue – even as the minority Democrats are calling for it.

Some other counties are, apparently, looking to make that move, such as Broome County. Oneida County Executive Joseph Griffo announced he will cap the sales tax. Griffo said that he didn’t think it would hurt the county’s bottom line and thought – as he wrote in his press release – that “giving up a few pennies at the pump may bring us a few pennies spent when consumers buy goods and services at our local merchants.” (This is the same Oneida County, by the way, that has the state’s largest sales tax rate at 9.5 percent).

Erie County Executive Joel Giambra has a different answer. As he told the Buffalo News his county needs all the funding it can get. Another viewpoint comes from an editorial in Newsday calling on Nassau and Suffolk counties to avoid joining in the sales tax cap.

It’s true that the increase in gas prices would likely mean more money for counties and municipalities that get sales tax proceeds.

But sales tax revenue hasn’t exactly shot through the roof for counties as gas prices have increased. That’s especially true in the Finger Lakes Region where the growth of the sales tax revenue is the lowest of all the regions – just 3.1 percent from 1999-2005. ( See the state Comptroller’s report on the sales tax for more information.)

Couldn’t Monroe County use that money as it faces budget problems?

So the dilemma for Monroe County is obvious. Brooks and the county lawmakers must balance the desire to give taxpaying motorists a break at the pumps with the reality that they are already asking for more in overall sales taxes from those same people to keep the county from the red.

That’s not easy. County Legislator Bill Smith, the leader of the GOP caucus, said it’s tough to consider this when asking for a sales tax hike from Albany.

“I don’t know if we’re in a position to do both at the same time,” Smith said.

Smith says Brooks hasn’t even broached the subject with the Republican caucus. We’ll see if the county executive does anytime soon… or just announces she’ll stay away from that sales tax issue.