Ulster lawmakers OK new sales tax deal

Five-year agreement could give more revenue to towns

Ulster County’s towns could see a bigger share of the county’s sales tax revenues under a new revenue-sharing agreement approved by county lawmakers Tuesday.

The new five-year agreement would take effect in March 2021 and would require city and county officials to meet by May of each year to discuss giving towns a larger share of any sales tax revenues received by the county in excess of the 2020 budgeted amount of $128,561,331.

Legislator Brian Cahill, who along with New Paltz Legislator Eve Walter spearheaded the change, said the move will finally give towns “a seat at the table.”

Under New York law, only the state, counties and cities can levy a sales tax, with cities having the right to pre-empt the county within the city limits. Kingston has historically opted to waive its right to pre-empt the county’s sales tax in exchange for a negotiated share of the total revenue.

The current agreement provides for a convoluted formula under which the city receives no

less than 11.5 percent of the county’s gross sales tax receipts and potentially more if certain sales tax revenue benchmarks are met.

County Finance Commissioner Burt Gulnick said that due to the impact of the COVID-19 pandemic on sales tax revenues, the city will receive only 11.5 percent of the total revenues this year.

Under that same agreement, the 20 towns in the county share 3 percent of the total sales tax revenues generated by the county’s 4 percent sales tax, although there is no legal requirement for the county to share any sales tax revenues with them.

Cahill, D-Ulster, said it has long “stuck in my craw” that although the vast majority of sales tax revenues to the county are generated by businesses located in the towns, the towns get only a small percentage of the revenues generated.

“What we came up with was a plan that would take any money collected in excess of the budgeted amount and have a more equitable distribution of that money,” he said. “We’re going to have a seat at the table,” he said of the towns.

The new agreement must still be approved by the Kingston Common Council and the state Comptroller’s Office.