NORWICH – A downward sales tax trend being felt across the nation has also found its way into local economy as the Town of Norwich reports a significant drop in revenue.
The Town of Norwich Board reviewed its 2009 second quarter sales tax revenue report and discovered about a 24 percent drop from a year ago.
However, in the first quarter they only suffered a slight decrease from 2008 of less than 1 percent from $99,435.16 a year ago, down to $98.753.19 in 2009.
The downward trend then returns in the 2008 fourth quarter, with $88,402.82 collected when compared with its 2007 fourth quarter counterpart of $130,768.48 – an overall reduction of around 32 percent.
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 this week by State Comptroller Thomas P. DiNapoli.  
“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.”
Town of Norwich Supervisor Dave Law says he and the board have been carefully monitoring the downward turn.
“Obviously there is a trend of decreasing sales revenue that has to be accounted for. If you ignore it’ll only make things worse in the long run. We are proactively trying to budget ourselves ahead just in case there’s more bad news,” he said.
Law said a major priority for the town has always been to minimize cost to the local taxpayers, but lately that has become even more of a challenge due to the chaotic economic and political conditions currently affecting the New York State government, which provides a considerable amount of money to local municipalities.
The Consolidated Local Street and Highway Improvement Program, offering road maintenance funds, is considered to be highly unpredictable by Law in 2010.
“I budgeted for $58,000 and we received $71,500 from CHIP in 2009, but I have no idea for what’s in store for us in 2010. Right now we’re looking at an austerity budget.”
Law said highway work in the town depends almost exclusively on the sales tax revenue and CHIP funding.
There was a rising concern that the town may one day need to implement a general tax, Law said, which he’s been able to avoid since taking office.
However, he scoffed at the possibility of a 2010 general tax, saying, “We’ll go without before we have a general tax.”
Besides the sales tax revenue, the town’s mortgage tax is also seeing a downward trend. In 2008, the town collected $69,524 in taxes, compared to $54,227 in 2009.
Law said any negative impacts of the loss would most likely be felt by the town’s highway department first, saying older equipment would be kept in use longer to avoid buying new. “We can go on what we’ve got for longer,” he said.
“In the last six years since I’ve been the town’s supervisor, I’ve never seen the state being so cold to us. We used to have an idea of where we were going down the financial road, but now we don’t even know were the road is. In the past they (the state) would let us know what to kind of expect, but this year we’re having a hard time with communication. No one seems to know what’s going to happen,” said Law.