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Towns, villages brace for sales-tax hit

Change in Walmart stores to redirect revenue

February 24, 2013
By JOHN BORGOLINI , The Leader Herald

When Walmart opens its new Supercenter on County Highway 128 this summer, the giant discount retailer is expected to generate annual sales tax revenue of $600,000 to $800,000 for the city of Gloversville.

At the same time, however, the towns and villages in Fulton County expect to lose at least $500,000 in sales tax revenue from the closure of Walmart's existing store on Fifth Avenue Extension. Because the existing store is in the town of Johnstown, all the towns and villages in the county get a share of the sales tax it generates under a revenue-sharing agreement. But the cities of Gloversville and Johnstown are not part of the agreement, so their sales tax revenue is not shared with the smaller municipalities in the county.

Northampton Town Councilman Bob Ellsworth brought up the issue at his board's meeting Wednesday, asking the other board members what they can do to counter the anticipated loss - which he estimates will total $100,000 for his town alone.

Ellsworth said the Town Board should hold a public meeting so residents can suggest solutions to making up the loss.

"Get the people in the community talking about it now, so when we get to October [starting the town's 2014 budget-planning process], we aren't saying, 'What are we going to do?'" he said. "A lot of people don't understand what's coming. We have a lot of serious decisions to make."

The town has been able to keep its property taxes low in recent years, with a tax levy of $384,458 this year - $8,073 less than what the state-imposed 2 percent tax-increase cap would have allowed.

Ellsworth said one option would be override the tax cap to raise the property-tax levy by 50 percent, which would make up for the loss and add about $50 to the average property owner's town tax bill, but he wants to give residents a chance to suggest alternatives. The Town Board expects to host such a meeting in May or June meeting, closer to the expected opening of the Walmart Supercenter.

Broadalbin Mayor Eugene Christopher said sales tax from the existing Walmart makes up 17 percent of his village's total annual revenue, so it could face a loss of about $23,000 with the closure of the store.

Christopher said the village could make up for the loss with income from the Bellen Road housing development, but that project isn't expected to start for two years.

"We have an annexation starting, and that's going to bring back more at that point," he said. "That's what you have to do. You have to plan for the future. It's going to be another two years before that starts developing because of all the rules and regulations the state has before [state officials] say it's OK. The state wants you to do things, but they have all kinds of rules and regulations. Until then, you tighten your belt."

Town of Broadalbin officials are expecting a $50,000 loss, and Supervisor Joe DiGiacomo said the town has just minimized what it can spend money on.

He is happy with the increase in his town's total sales tax revenue in 2012, and he expects that trend to continue and offset the Walmart loss.

Mayfield Town Supervisor Richard Argotsinger said his town's officials plan to keep a watchful eye on spending to offset the $150,000 or more it is expected to lose due to Walmart's plans.

"We've taken that into consideration into our two budgets," Argotsinger said. "We've just basically went to reserve accounts for purchasing of equipment and doing construction projects in the town. We're just not going to be able to do them on a regular basis. We're going have to save up to do them ... You lose revenue at that amount - there's no easy way to replace it. We, as most of the towns in Fulton County, encourage businesses to move into towns. I don't know what else you can do."

 
 

 

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