DiNapoli: Local sales tax revenue climbing

Collections uneven between downstate and upstate New York

Local sales tax collections grew by $397 million, or 5.7 percent, for the first half of 2013 compared to the same period in 2012, according to a report issued recently by State Comptroller Thomas P. DiNapoli. Much of the growth was focused in regions downstate.

"The growth in sales tax revenue is a promising sign for many communities," DiNapoli said. "Unfortunately, the economic improvement has been uneven and the trends are headed in the wrong direction for some of our most vulnerable municipalities. Sales tax collections are a vital source of revenue for local governments. Without positive growth during the second half of the year, many local budgets will be under increased pressure."

DiNapoli's analysis found that year-over-year growth in sales tax collections was 5.5 percent in the first quarter of 2013 and 5.9 percent in the second quarter.

The gains were driven by especially strong sales tax growth downstate during the first half of 2013. Long Island had 8.5 percent growth in sales tax collections while New York City's collections increased by 7.5 percent during this period. These increases were likely fueled by cleanup and rebuilding efforts following "Superstorm" Sandy.

Upstate sales tax collections growth, meanwhile, was considerably slower. The Mid-Hudson Valley (4.4 percent) and Western New York (3 percent) outpaced the growth in Central New York (2.3 percent), the Capital District (1.2 percent) and the north country (1.1 percent).

At the county level, Nassau County (11 percent) and Rockland County (9.3 percent) experienced the most growth. Other counties that fared well include: Genesee County (8.5 percent); Niagara County (7.8 percent); Essex County (6.6 percent); Suffolk County (6.2 percent); and Westchester County (5.8 percent).

By contrast, collections declined by 3.3 percent in New York's Southern Tier. The counties of Chemung (-6.4 percent); Tioga (-5.4 percent); and Broome (-5.1 percent) saw the most significant declines. Other notable declines were experienced in Schoharie County (-4 percent); Steuben County (-3.8 percent); Schuyler County (-3.4 percent); and Sullivan County (-2.6 percent).

While some short-term variation in sales tax growth comes from technical adjustments in the distribution of local sales tax collections, this overall pattern could indicate a slowing in the upstate economy.

For a copy of the report, visit http://www.osc.state.ny.us/localgov/pubs/research/snapshot/localsalestax0813.pdf.

For access to state and local government spending and more than 60,000 state contracts, visit http://www.openbooknewyork.com/. The easy-to-use website was created by DiNapoli to promote openness in government and provide taxpayers with better access to the financial workings of government.