Sales Tax Revenues Show Signs of Economic Weakness

Another quarter of weak sales tax receipts have county leaders concerned, according to the New York State Association of Counties (NYSAC).

“Counties rely on two forms of revenue: sales taxes and property taxes. We are not raising property taxes. When our sales tax revenues are flat or decline, we have to pay attention,” said NYSAC President Anthony J. Picente Jr., who saw Oneida County’s sales tax receipts fall more than 5 percent from the first quarter of 2014.

Thirty-three (33) counties collected less in sales tax in the first quarter of 2015 compared to 2014. Of these counties, 12 saw their collections drop by more than 5%. Outside of New York City, the average change per county was -.9%. NYC had an increase of 1.2% in sales tax revenue, far less robust than recent quarterly returns.

It is not clear what the reason for this sharp drop off is, but there are two major factors that may be contributing to these numbers. This winter brought some cold and snowy weather, and gasoline prices were nearly 32 percent lower in the first quarter of 2015 compared to 2014. Both factors are likely to be part of the cause, but don’t negate the impact of these disconcerting numbers.

“Sale tax collections are an important economic indicator. These taxes have a direct relationship to consumer confidence and the general direction of the economy measured during a certain period of time,” said NYSAC Executive Director Stephen J. Acquario. “As property taxes remain flat across the state, sales taxes are even more important to local governments trying to continue essential governmental services. This quarterly distribution continues to demonstrate volatility and uneven collections across the state.”