More Talk, Still No Action on County & Towns Revenue Share

By Holly Crocco

The debate surrounding revenue sharing between Putnam and its towns/villages continues in the County Legislature, with some lawmakers backing a plan that differs from one the county executive and various supervisors and mayors proposed last month.

In the beginning of April, the Putnam Legislature voted to reduce the county’s sales tax rate by a quarter of a percent – or $5.3 million – since the county has collected more in sales tax revenue than it has budgeted over the past several years.

However, County Executive Kevin Byrne vetoed the matter, later joining with every town supervisor and village mayor in the county to propose an alternative plan that maintains the current sales tax rate and shares one-ninth of 1 percent with the local municipalities based on population. Under the agreement, the shared funds must be used for public projects such as infrastructure and capital needs, and not for payroll or general operating expenses.

If sales tax revenue remains consistent with last year, the total shared amount would be approximately $2.44 million.

The many legislators don’t like that plan.

During the April 28 Audit Committee meeting, Legislator Amy Sayegh, R-Mahopac Falls, introduced a resolution that instead calls for the county to share $3 million of its fund balance surplus with the towns, based on population per the 2020 census. Distribution would be at the discretion of the Legislature once an intermunicipal agreement has been enacted between the county and the municipality, and – just like Byrne’s proposal – would need to fund infrastructure and/or capital improvements, or essential services, and not payroll.

“We all know how up and down sales tax is – it’s difficult for anyone to budget based on sales tax,” said Sayegh. “I’ve said all along that I am not in favor of sharing county funds based on sales tax. I think those are two separate items. I think that if we want to share with our towns… It’s prudent to base that on a fixed amount so they know exactly what they’re going to get.”

Legislator Toni Addonizio, R-Kent, not only supported the resolution, but suggested amending it to allocate $5 million in shared fund balance over two years, saying the towns will then have a clearer number of what they will be getting, as opposed to whatever one-ninth of 1 percent ends up being that quarter.

She said Putnam Valley, for example, would receive $293,300 a year if it receives a portion of the sales tax under the county executive’s proposal, or $600,000 if the county shares $5 million in fund balance.

“Given the long-term benefits to our community, I strongly recommend this proposal be approved and it be this year, for 2025,” she said. “I don’t see why it has to be tied to anything but our fund balance, which we have $19 million right now.”

Legislator Greg Ellner, R-Carmel, agreed with Addonizio’s amendment.

“It’s a finite amount,” he said of the offering, also noting that, in addition to the existing fund balance surplus, the county has between $8 million and $12 million unspent from 2024 yet to be factored into the budget. “So the effects of this are going to be minimal.”

Legislator Erin Crowley, R-Mahopac, disagreed, saying the resolution has “red tape that makes it less sustainable than the sales tax sharing alternative and highlights its temporary nature as a one-shot.”

“I never see it leaving sub-contingency” if municipal leaders have to go through an approval process every time they want to spend the funds, she said.

The sales tax sharing proposal, according to Crowley, “provides a more sustainable revenue stream to support our county, town, and village governments, and better positions us to provide more meaningful tax relief to all.”

Legislator Nancy Montgomery, D-Philipstown, also expressed doubts about sharing the fund balance surplus, saying shared sales tax revenue is simpler.

“If there’s surplus, we share it. If there’s not, we don’t,” she said. “It make sense to me.”

Cold Spring Mayor Kathleen Foley noted that the county has been spending sales tax generated by the towns for decades, without any requirements.

“You’re welcome, for all the years that we’ve been sending you sales tax and never telling you how to spend it,” she addressed the committee.

Kent Highway Superintendent Richard Othmer said the state trusts towns and villages to manage funding when grants are awarded, and the county should do the same.

“Don’t complicate something that’s not complicated,” he said. “Break out the checkbook, write the checks today, and we’ll be all set – we know what to do with it.”

Putnam Valley Town Supervisor Jacki Annabi said the sales tax revenue sharing is a more sustainable option than the allotment of surplus fund balance.

“We understand that it fluctuates,” she said of the sales tax. “That’s why it’s one-ninth of that 1 percent. That helps us get our bonds, that helps us get our budgets. We know this, but the $3 million, the $5 million that we are talking about this year, that’s not sustainable (to continue every year). We can do great stuff this year… but we need something that’s sustainable.”

Putnam Valley Town Councilman Christian Russo agreed. “We really need a sustainable course of support, not just a temporary grant,” he said. “Long-term, we’d really like to have this sales tax sharing because that would really help us for years to come.”

Putnam Finance Commissioner Michael Lewis cautioned the county against giving away too many funds, no matter how it’s done. “We don’t know what the feds are going to do,” he said. “If the feds cut programs, it’s going to trickle down to the state and then they’re going to trickle down to us.”

Southeast Supervisor Nick Durante said his town could use the funds to offer better salaries to employees.

“I’ve only been here a year and a half, (and) we’ve lost three building department secretaries because we can’t offer enough money to someone to live a life in Southeast, and that’s awful,” he said.

No movement was made on the resolution.