Sluggish sales tax receipts show cracks in economic recovery

News from the New York State Association of Counties finds sales tax receipts are slowing in a number of counties upstate, reflecting a still fragile recovery among consumers from the prolonged recession that began in 2008.

The fourth quarter in New York shows a mixed picture and uneven impact of sales tax on a county-by-county basis. While aggregate sales tax collected statewide is up by 5.24 percent ($26.7 billion compared to $25.4 billion), much of the total dollar increase is generated from strong growth in New York City, Long Island and downstate counties, likely due to Hurricane Sandy rebuilding.

Upstate, county sales tax receipts for the fourth quarter are much weaker than projected. Nearly half of New York counties (27) had negative sales tax growth in the final quarter of the 2013 county fiscal year. The pattern of uneven growth continued in the Southern Tier through much of the Hudson Valley. Up into the Capital Region, counties are showing signs of continuing weakness.

NYSAC Executive Director Stephen J. Acquario said, "The fourth quarter sales tax collection, which includes holiday shopping, is a key indicator of our state and local economy. These numbers concern us. The uneven collections demonstrate the need for continued focus on economic development statewide."

For Western New York, the numbers were somewhat positive however, with Erie, Niagara, Genesee, Cattaraugus and Alleghany counties all experiencing sales tax growths ranging from 2.5 percent to 5 percent. Those numbers likely reflected continued strong activity from Canadian shoppers.

Other Western New York counties, including Orleans, Wyoming and Chautauqua, saw negative growth in tax receipts, while the Rochester-area counties of Monroe, Livingston and Ontario had sales tax growth under 2.5 percent.