NORWICH – In its final meeting of the year, the Norwich town board discussed a challenge ahead in 2009 – a potential loss in sales tax revenue.
“We are anticipating a 20 percent less revenue gain from the sales taxes in the year ahead,” said Town Supervisor David C. Law.
Law said the anticipated loss of revenue stems from the slow down in the economy combined with a decrease in sales by local car dealerships, which generate sales tax revenue for the town.
Law said there were “at least eight, large to medium sized dealerships in the town,” and that after speaking with local representatives, he believed a revenue loss was imminent.
“Not just here; I’d say across the board for New York State. I’ve spoken with local dealers and businessmen and they have relayed concerns over the auto industry and dropping sales. They tell us either that their sales are ‘definitely off’ or they’re just ‘holding their own,’” said Law.
Law said the Town of Norwich collects about $320,000 annually in sales taxes and a 20 percent drop would mean a loss of about $64,000 in the projected 2009 budget.
“The revenue of the collected tax is what helps us offset other costs to the taxpayers,” said Law, who added, “the 20 percent is a conservative estimate the town is making. It will most likely not be that low. Even if it was, the impact wouldn’t be anything we couldn’t cope with.”
Law said the town may postpone some of its summer road work if the economy takes a turn for the worse.
“Everyone is tightening up their belts. People are spending less and sales taxes are going down. The board and I want to be prepared,” he said.
Law said it was not all bad news on the local front and that Norwich dollar store retailers were doing well – and he said Wal-Mart’s sales were so far unaffected.
The board also briefly discussed the looming increases in water and sewer rates. “No final figure has been agreed upon and we’ve only had a general meeting with them (the City of Norwich),” said Law.
Law said no figures had yet been officially released by the city because of a possible grant that maybe available in light of President-elect Barack Obama’s $500 to $700 billion economic stimulus plan for government infrastructure.
“Well have to see what aid we might get from Obama’s stimulus package and hopefully it will be able to help,” he said.
The board expressed concern over the possible increases but decided to hold off on discussions until the proposed rates could be released.
The town owns it sewer and water lines, but pays the City of Norwich for its water supply and treatment. “We are their customers,” said Law.
Law said the board would hold a public hearing before any increases were implemented. “We are thinking sometime in late January,” he added.
Although the amount of the proposed increase was not disclosed, Law said it was “definitely going to be a large increase,” saying that the city’s facility was in need of repairs and that rising cost of general services and materials were weighing into the rate.