WPCNR ALBANY ROUNDS. From the Office of the New York State Comptroller. (EDITED)with Reporting by WPCNR September 2, 2009: Local sales tax revenues across New York State, including New York City, were down 8.9 percent, or $640 million, for the first seven months of 2009 compared with same period last year, according to an analysis released Tuesday by State Comptroller Thomas P. DiNapoli.
This report backs up WPCNR’s analysis of August 18 based on figures from the Department of Taxation and Finance that White Plains retail sales continued their decline, down 12.5% year to year in the first month of the city fiscal year in July, the second straight month sales tax had declined from the previous year. This latest number continues the trend first reported by WPCNR six months ago indicating White Plains retail was running 12% behind 2007-2008 collections, and Westchester County is down 13% in sales tax through seven months.
“It’s not surprising that local sales tax revenues are down so significantly,” DiNapoli said. “Back-to-school shopping makes September a very important month for sales tax revenues. Local governments need to take a hard look at the September data. Just like the state, if local governments are not on track to meet their budgeted revenues for the year, they need to make adjustments in their spending now without placing a greater burden on local taxpayers.”
While every region of the state experienced declining local sales tax revenues, Long Island and the Lower Hudson Valley declined the most at 10.1 percent each. New York City saw a decline in sales tax revenues of 10 percent, or $285 million. The Mohawk Valley saw the least decline at 3.2 percent during the first seven months of 2009.
Counties experienced a 7.6-percent decline from January to July of this year over the same seven months last year. If this trend continues for the remainder of the year, counties may see their first annual decline in sales tax revenues in 18 years. Back-to-school shopping makes September the most important sales tax collection period outside of the holiday shopping season, making it a key month for local governments to watch.
Six counties had sales tax revenues decline by double digits: Putnam, Delaware, Westchester, Monroe, Suffolk and Saratoga. The only counties to experience sales tax revenue growth were Seneca, Schuyler, Tioga and Genesee. These increases were mostly due to payment timing issues, although about one-third of Seneca County’s 13.1-percent growth was due to new retail development.
Click here to view DiNapoli’s analysis.
Click here to download audio from Comptroller DiNapoli on this topic.
Here is partially what WPCNR reported on White Plains and Westchester County trends two weeks ago:
If sales tax does not recover significantly (and holds at the present level), to make up that shortfall, the city would have to enact an 18% property tax increase.
The County of Westchester sales tax receipts are down 12.9% over the first six months of the county 2009 fiscal year.
Common Council President Benjamin Boykin told WPCNR in July, when the final quarter of 2008-09 fiscal year failed to meet projections of the City Finance Commissioner by $1 Million , that he is going to call for a budget review in September.
Westchester County sales tax collections in the first six months of 2009 have declined too. The county “handle” on sales tax receipts is down 13%. The county collected $33.8 Million less in fiscal 2009 at the halfway point than the county did in 2008, according to statistics from the New York State Department of Taxation and Finance Office of Tax Policy Analysis.
The pace of retail sales projected by White Plains Week and WPCNR in the spring of this year continues to indicate key sales tax collection in the city are consistently 12 to 13% off.
On the county level the county as of midway is running $3.8 Million behind in sales tax receipts, 12.5% below the collection pace of last year after half of the 2009 fiscal year. If the retail trend continues, the county would face a $3.8 Million deficit in sales tax receipts for the year. The county budgeted to collect $478,235,000 in sales tax for the year.
In the first six months of 2008, Westchester County collected $271,096,156.95 in sales tax. In the first six months of 2009, they collected only $237,221,726.61, a decline in receipts of 12.5%.
This combined with obvious deficits in mortgage and hotel tax collections is not a positive trend.
In White Plains if the 12.9% fall-off in retail sales tax collections continues it means the city faces a $6 Million budget shortfall. It already has a $1 Million deficit left over from 2008-09. The city budget calls for collecting $47,250,000 in sales tax in 2009-2010. If the 12.9% decline continues, the city will only raise $41 Million in sales tax.
However, August is the second most lucrative retail sales month of the year next to the holiday season in the second quarter, so there is hope this is just a sluggish start. To correct the nearly 13% decline in July, the city would need to generate a half million dollars more in August sales tax receipts to get back on track with their hoped-for sales tax pace. In August, 2008, the city collected $3.9 Million in sales tax (however that was inflated by the additional ¼% sales tax added last year. The cumulative effect of a soft retail market is not easily erased.
DEPARTMENT OF TAXATION & FINANCE
OFFICE OF TAX POLICY ANALYSIS
SALES TAX MONTHLY CASH/COLLECTIONS REPORT
MONTH OF JULY 2009
CASH JULY 09 CASH JULY 08 CUMULATIVE CUMULATIVE
CASH 09 CASH 08
White Plains City $3,431,350.08 $3,938,113.71 $25,379,226.67 $26,641,410.77
Westchester Cty $31,249,530.49 $35,646,779.50 $237,221,726.61 $271,096,156.95
