Schenectady city, county battling over sales tax distribution

SCHENECTADY — Schenectady County has threatened to take back every cent it gives the city of Schenectady unless the City Council signs a new sales tax agreement Monday, Councilman Mark Blanchfield said.

But Blanchfield is playing hardball, too. He’s spent weeks trying to convince the council to reject the contract, and if his efforts fail, he can block it single-handedly with an obscure legislative rule.

Blanchfield said he thinks the county is pushing hard for the new agreement because it will otherwise be forced to give the city and the towns much more of the sales tax next year. The prospect of additional revenue is so certain that he thinks it’s worth risking the loss of funding for hazardous materials response, several police officers and the Central Park greenhouse.

“They’ve threatened to take those away. But you know, every year the legislature could cut that, like they did this year [by reducing hazmat funds],” Blanchfield said. “The prospect of keeping that for one year doesn’t justify a six-year deal.”

At issue is a sentence in the sales tax agreement written more than a decade ago. At the time, the county and city agreed to share the sales tax with the towns at a flat rate each year. If the total collected exceeded a certain amount, every municipality would share in the extra. That’s never happened — but this year the county came within $500,000 of being forced to share. In the new agreement, which would take effect immediately, the city and towns would forever give up their right to share in any excess.

In exchange, the city would get $25,000 more than the $11 million flat rate it gets now. For six years, the county would add another $25,000 to the total, upping the rate to $11.1 million by 2014.

“That’s really not that much as the opportunity to grow it with sharing,” Blanchfield said. “That’s not much at all.”

County attorney Chris Garner said the city would be better off if it accepted the deal.

“We may be on the verge of a Great Depression. Auto sales are down 35 to 40 percent. To have a guaranteed small growth is, I think, a good deal,” Gardner said.

He argued that the county is unlikely to reach the point of having to share additional sales tax next year. But if it did, he said the county needs the money more than the city.

“If you just look at Medicaid – it’s grown in five years from $20 million to $33.4 million,” he said.

He also rattled off a list of ways in which the county helps the city — including $75,000 for the Central Park greenhouse, $200,000 for hazmat and $125,000 for police officers. He said county negotiators had warned that the county might need to cut back on such items if it can’t get additional sales tax revenue, but insisted that no “threats” were made.

“It depends on our ability to pay, so those things are all in the mix, but there’s been no threats,” Gardner said. “We have a good relationship with the city. Working together does work.”

But Blanchfield said he’s disgusted by the county’s unwillingness to share in the extra revenue it may receive next year.

“Working together works?” he said. “Yeah, it works for some people.”

The towns have not yet received written copies of their proposed agreements, but Glenville town Supervisor Frank Quinn was also dismayed by the negotiations.

“Knowing what I know from the towns, they’re not ready to vote.” he said.

Under the current agreement, the county retains no more than 60 percent of the local sales tax receipts - less what goes to the Metroplex - up to a threshold of $83.5 million. The county has yet to hit the $83.5 million threshold.