POUGHKEEPSIE –The cities of Poughkeepsie and Beacon and Dutchess County have reached a new 10-year agreement governing the distribution of sales tax by the county to cities and towns. The new agreement is subject to approval by the Common Council, the Dutchess County Legislature, and ratification by the Office of the New York State Comptroller.
The agreement was recently approved by the Beacon City Council. It replaces an expiring agreement that took effect in 2013.
Poughkeepsie Mayor Rob Rolison said, “This agreement recognizes the symbiotic relationship our local governments have with Dutchess County, and it provides for the equitable and fair distribution of sales tax revenue between us all. It also balances a number of issues critical to the City of Poughkeepsie, including the fact that we are the seat of the county government and have been designated by the Office of the State Comptroller as one of the most fiscally stressed municipalities in the state.”
The mayor also said the agreement is also “an important component of the Deficit Reduction Plan the city implemented back in 2017. With the approval of this agreement by the legislative bodies, we will enter the final phase of our multi-year plan to retire the city’s fund balance deficit – a deficit that reached as much as $13.2 million as of the end of 2015, and which currently stands at about $8 million.”
County Executive Marc Molinaro said, “Providing the City of Poughkeepsie with immediate deficit reduction aid also is imperative and replacing an expiring agreement provided a unique opportunity for the county to offer assistance. The city has worked diligently to pull itself out of a substantial deficit, and a financially stronger city makes for a stronger Dutchess County as well.”
City officials noted that the new agreement will increase sales tax revenue to the city by approximately $2.4 million beginning in 2023. The agreement provides an immediate $3 million payment and includes increases in percentage distributions to the cities over the next 10 years.
Poughkeepsie Common Council Majority Leader Evan Menist, speaking on behalf of council leadership, said, “The City of Poughkeepsie is the heart and economic engine of the Mid-Hudson Valley, and the sales tax generated at our merchants, restaurants, and venues helps drive growth in Dutchess County at large. This new agreement will help get Poughkeepsie on a stronger financial footing for the next decade and we are excited to see these new revenues roll in.”
City Finance Commissioner Dr. Brian Martinez said, “Historically, sales tax revenues are one-fifth or more of the city’s General Fund revenues, making these negotiations extremely important to the future of the City of Poughkeepsie. Based on changes in consumer behavior due to internet sales, it’s not unreasonable to expect continued growth in sales tax revenues during the coming years. In the first year of the new agreement, the City of Poughkeepsie will receive an increase of $2.4 million. The city’s 2023 share is 5.41 percent. This is a 20 percent increase compared to our current 4.5 percent share. The new agreement guarantees that percentage increases in gross sales taxes from the state will be equally applied to the cities, towns, and county. So a 4 percent increase in next year’s revenue from the state would equate to hundreds of thousands in new revenue in every year where there is growth in sales tax revenues.”
