Local Sales Tax Hike Could Take Effect By Dec. 1
Anticipating major revenue shortfall, County Executive Ed Day has submitted three draft Resolutions to the County Legislature to propose ways to generate additional revenue to stabilize Rockland’s finances in advance of decision-making over the 2021 budget.
“We are facing never before seen impacts on our budget and need to do everything possible to decrease spending while finding ways to increase revenue,” said Day.
Day said his administration’s previous actions reduced year-over-year spending by more than $18 million by the end of June but an anticipated revenue shortfall of $40-50 million, along with New York State cutting 20 percent of state aid and reimbursements, would squeeze the county from all sides.
“If we just accepted this fiscal situation it would result in the need for 200 layoffs,” said Day. “That is why we need to take these additional steps to protect our employees from possible layoffs and property taxpayers from the double-digit rate increases of the past.”
The first Resolution authorizes the sale of the Sain Building, 18 New Hempstead Road, New City, with all proceeds from the sale to be applied to offset any financial losses caused by COVID-19. The original purchase offer for the building in March of 2016 was $4.51 million. The prior sale would have also returned the building to the property tax roles and generated $500,000 in total annual property tax revenue for the Town of Clarkstown, Clarkstown Central School District and County of Rockland. While the sale would put money back into Rockland’s coffers, it’s unclear how long it would take for the building to sell.
The building was officially closed in December of 2017.
The second Resolution calls for the temporary addition of one-half of one percent to the local sales tax to take effect December 1, 2020, or as soon thereafter as possible, for a period of three years until November 30, 2023.
“The temporary sales tax Resolution is the lynch pin to successfully navigate these unprecedented times and the passage of all these Resolutions by the County Legislature and NYS Legislature will help us continue to chart a responsible path forward. We have already met with Legislative leadership and notified every Legislator of the criticality and need behind these Resolutions,” said Day. “I thank the members of the County Legislature who have already agreed to support these measures and look forward to their passage during the next Legislative session on Tuesday, September 1, 2020.”
This Resolution would also need to be passed by the New York State Legislature and signed by Governor Cuomo. The current sales tax rate in Rockland County is 8 and 3/8ths percent, this Resolution would raise it to 8 and 7/8ths percent equal to the rate of Yonkers and NYC.
The third Resolution would push back the 2021 proposed County Budget submission requirement from October 1, 2020 to October 23, 2020. Rockland is due to receive two sales tax disbursements from New York State on or before October 1, 2020, with two additional disbursements due to the County on October 7, 2020, and October 13, 2020. This three-week delay will allow for the collection of more data and therefore a more accurate projection of the 2021 proposed County Budget.
Additionally, Day notified the County Legislature last week that the County would only move forward with $19,975,000 in Capital Borrowing down from the $40 million that was planned for pre-pandemic. This borrowing reduction will not influence the 2020 Budget but will cut principal and interest payments on these projects from $3 million to $1.5 million in 2021.
“We closely reviewed the necessity of each of these projects and are only moving forward with those that are already in progress, those which will show a positive return on investment or those which are critical infrastructure improvements,” said Day.
Rockland County has taken several actions to mitigate financial harm including implementing austerity measures that permitted only COVID-related and essential purchasing, a hiring freeze except for essential personnel and those working directly on the COVID response and applying for FEMA Disaster Assistance. Day says the county abolished 18 vacant and unfilled positions in July for nearly $1 million in savings.