The budget squeeze in Chemung County could be tightening. A controversial plan to redistribute the county's shrinking sales tax revenue is sparking fear among municipalities. YNN's Crystal Cranmore tells us why local leaders are concerned by the proposal.
HORSEHEADS, N.Y. -- As a government leader, it's never easy dealing with finances.
"When we saw the numbers Monday night, it was, 'Oh boy, how are we going to do this?'" asked Horseheads Village Manager Walt Herbst.
Town and village leaders heard the details of Chemung County Executive Tom Santulli's sales tax redistribution strategy this past week. The proposal includes decreasing the percentage of tax revenue each municipality would get by about three percent, while increasing the county's share each year until 2018.
“It's really difficult because the sales tax revenue represents almost as much as our property tax revenue. So it's hitting us hard,” said Herbst.
The sales tax redistribution proposal is part of the county's financial restructuring plan. It aims to offset a projected $6.5 million shortfall in sales tax revenue if current economic trends continue.
“You can’t lose $150 million in payroll and $122 million in spending and roughly two to three thousand jobs depending on the gas industry and think that it's business as usual,” said Tom Santulli, Chemung County Executive.
Right now the county splits its eight percent sales tax revenue evenly with the state. It keeps one percent for Medicaid costs and splits the rest with the municipalities. Santulli says over the last 12 years, towns and villages received $24 million more in sales tax than they anticipated.
“I think they are positioned to handle this, some not all,” said Santulli.
But Herbst said his general fund balance in Santulli’s presentation is misleading because it includes trust money that can't be touched.
Local leaders are expected to meet with the county this week to discuss other ideas. Should the proposal pass, the village is looking to share more services. They are also looking at hiring a financial expert.