NORWICH – Despite some evidence of a slowly recovering local economy, a first glance of first quarter sales tax figures released by the New York State Department of Taxation and Finance for Chenango towns and villages might indicate otherwise.
Sales tax in all towns and villages in the county saw a decrease in first quarter sales tax compared to those of the first quarter in 2012. Overall, final figures indicate an 8.98 percent decrease ($100,218) in sales tax cash distributions to towns and villages compared to last year. Those percent decreases range from as little as 2.2 percent in the Town of Sherburne, to as much as 25.7 percent in the Village of Smyrna - a sure indication that people are spending less in the area.
Although the decrease appears to spell out bad news for the local economy, it isn’t without explantation, according to Chenango County Treasurer William Craine. Much of this year’s apparent decrease might be attributed to the spike in sales during the first quarter in 2012, he said, when a warm spring encouraged hundreds of homeowners to take-up rebuilding projects after tropical storms Irene and Lee devastated parts of the region in the fall of 2011.
“I think there was some increase last year because of the flooding in 2011. Fortunately, that is something that didn’t repeat itself in our area this year,” he said. He also noted that the first quarter of any year is a shaky reflection for the rest of the year because it comes at the heels of the holiday shopping season and at a time when many people purchase new vehicles.
A similar pattern of declining sales taxes can also be seen in nearby counties, most impacted by Irene and Lee, including Tioga, Schoharie, Chemung and Broome counties.
When comparing Chenango’s gross sales tax from recent years, numbers are not as bleak, Craine pointed out. The county has steadily increased its gross payments over the last three years, from $18 million in 2010, to $20.1 million in 2012. It is still much too early to predict an outcome for this year, said Craine. “Our two principle sources of taxes are property tax and sales tax and when one is off, it puts pressure on the other.”
Sales taxes for the first quarter in the City of Norwich are a different story. Thus far, city officials are touting an increase in sales taxes revenue, up more than $105,000 from this time last year and exceeding the preliminary estimate of $368,000 for the first quarter. City Finance Director William Roberts called it a “positive start” to the year, but like Craine, said it’s still too early to make predictions for the months ahead. “These numbers look like a good start, but there are still nine more months to look at,” he said.
Though still early, city officials do predict breaking last year’s sales tax revenue, which totaled $1.37 million by year’s end - $47,000 below estimates adopted in the 2012 budget, thanks partly to the temporary closing of McDonald’s restaurant for construction during the summer months, according to City Mayor Joseph Maiurano.
Said Roberts, “We don’t always get off to this kind of start; but whether we are above or below estimates now, we can’t draw any conclusions.”