LYONS — In what he termed was “strictly a discussion — not a proposed resolution,” outgoing Ontario Town Supervisor Bob Kelsch suggested to the Wayne County Board of Supervisors Finance Committee Tuesday that the county scrap sharing $5.4 million of sale-tax revenue with school districts.
It’s an idea that has been been proposed by the county in the past but ultimately rejected after protests by school administrators.
Area districts would see cuts in revenue if the county stopped sharing sales tax: $800,479 in Newark, $684,353 in Pal-Mac, $862,816 in Wayne Central, $404,2123 in Gananda, $320,948 in Marion, $332,234 in Clyde-Savannah and $345,078 in Lyons.
The sales tax in Wayne County is currently 8 percent, and half of that revenue (4 percent) goes to the state. Of the remaining 4 percent, half goes to the county (2 percent total), 16.67 percent to the towns and villages and 33.3 percent goes to school districts. The school district amount is capped at $5.4 million.
Kelsch pointed out that $229,185 of the school districts’ share is parceled out to schools that are largely outside of Wayne County, but have some land within the borders – Cato-Meridian, Penfield, Midlakes, Port Byron, Victor and Webster.
He said the County Board of Supervisors has some choices:
- Keep the present system and the allocations to school districts.
- Keep all the sales-tax revenue for county purposes.
- Give all $5.4 million to the towns and villages.
- Establish an economic development and planning fund.
-Do something else.
Kelsch said the larger the school district, the less impact there will be if the sales-tax revenue disappears. He said taking the sales-tax revenue away from school districts would positively affect towns and villages more significantly. But he knew a drop in revenue would cause some pain in school districts.
“Schools may decide to recoup the revenue lost by increasing school taxes,” he said.
He noted that under the old STAR (the state’s School Tax Relief Program) program, the county “would have picked up an additional $1.1-plus million,” but the state imposed a cap in 2011 that resulted in the county getting a little over $100,000. So, the STAR program will not bring much relief if school districts raised taxes, he said.
Kelsch suggested the county lobby hard in Albany to lift the STAR cap, allowing the return to the old STAR funding.
On the other hand, Kelsch argued that with more money coming into towns and villages and offsetting property taxes there, homeowners would be better off in their bottom-line tax payments.
Based on his calculations, someone owning a house in Palmyra would pay $101 less in total taxes after school taxes went up but town taxes went down.
Galen Supervisor Steve Groat said he would like to see the same proposition from the school district side.
Page 2 of 2 - Dave Sholes, Red Creek schools superintendent, said the county program of sharing sales-tax revenue with schools “is not anywhere near where it was originally intended” back in 1967, in terms of support for schools. He said the sales-tax revenue in his district is applied directly to reducing taxes for students coming from Wayne County.
“To raise school taxes … people vote on our budget, and that could be an issue,” Sholes told the committee.
“If a budget fails, he said, “we would have to make cuts.”
“There’s always been a history of one group feeling like they’re not getting a fair share of the sales tax,” said County Treasurer Tom Warnick.
But in this discussion, he warned, “nobody’s talking about the impact on the business community. (With reduced county support for schools) we would be shifting a lot of the tax burden from residents to business owners, and that’s not something the county would want to do.”
The full board wil meet on Wednesday, Dec. 4 at 1:30 p.m. to discuss the issue.