Comptroller: NY sales tax collections on the rise

By Michael Gormley ALBANY, N.Y. — In another sign of slow economic recovery in New York's communities, sales tax revenue last year matched or exceeded pre-recession levels of 2008 in most parts of the state, according to a report released on Feb. 21.

State Comptroller Thomas DiNapoli said sales tax collections grew by 5 percent last year, raising that revenue in many parts of the state above 2008 levels. But DiNapoli said the figures reflect continued slow recovery, which is even slower than in 2010.

He said the higher sales tax collections “are a good sign for the economy, but continued caution is warranted," DiNapoli said. “New York's economy has improved over the past two years, but growth has been sluggish and unevenly distributed throughout the state. The degree to which local governments depend on sales taxes varies, but it is an important source of revenue for many."

He also said sales tax revenue could become even more important to local governments as they adjust this year to a 2 percent cap on the growth in local property taxes imposed by Gov. Andrew Cuomo and the Legislature. The law effective this year includes an override provision by school district voters or local government boards.

The state sales tax rate is 4 percent, but counties and cities can set their own rates, usually 3 percent to 4 percent. Counties then distribute some county sales tax revenues to municipalities.

For counties increasingly dependent on their own sales tax revenue, DiNapoli reports a 4.1 percent increase in county collections in 2011 over the year before. That's up nearly $7 billion.

Counties have regained the lost money from a nearly 6 percent drop in.

New York City's revenue grew by 6.1 percent to nearly $6 billion last year. Adjusting for local economic factors, that's lower than the 2010 growth rate of about 10 percent.

The strongest gain — 8.6 percent — was in the Southern Tier, pushed by construction after last summer's flooding. Construction and repair after tropical storms Irene and Lee also contributed to 19 percent growth in sales tax revenue in Schuyler County.

However, communities hit by the late summer storms in the Mohawk and Schoharie valleys, the Catskills and Southern Tier continue to try to recover from damage to homes, schools and services that far exceeds the sales tax revenue. In all, the storms are blamed for more than $1 billion in damage to upstate New York, little of which was covered by individual or business insurance.

There was no immediate comment from the New York State Association of Counties.