Local sales tax collections grew by $650 million, or 5 percent, from 2010 to 2011, compared to a growth rate of 9.9 percent between 2009 and 2010. However, nearly a third of the 2010 growth was attributable to a sales tax rate increase in New York City. Without this, growth would have been about 7 percent.
This report briefly describes that the average allowable levy growth is 3 percent, rather than the 2 percent voters may be expecting.
All tax cap elements, as reported by school districts to the Office of the State Comptroller, are provided in the accompanying tables.
In 2010, the 114 active IDAs located throughout the State supported 4,444 projects and provided total tax exemptions of nearly $1.3 billion.
This report seeks to inform that debate by examining the economic and fiscal histories of these other cities between 1980 and 2010, a period characterized by divergent trends for different groups of cities in the Empire State.
Sluggish growth in sales tax revenues adds additional pressure to already strained county budgets and to the budgets of other local governments that receive sales tax revenues through sharing agreements.
IDAs can assist ailing municipalities by encouraging the creation of new businesses or the retention of existing businesses. However, it is vitally important that the granting of tax exemptions for a project will generate an economic benefit in the form of well-paying jobs and/or future new revenues for local governments. In short, incentives should be coupled with performance.
Total local sales tax collections in New York State grew by $439 million, or 3.0 percent, from 2013 to 2014.1 This was less than the 2012 to 2013 growth of 5.2 percent, and the slowest annual growth since the end of the 2008-09 recession.
Sales tax is a major revenue source for New York City and the 57 counties. The strongest growth for 2013 was in the Long Island region Some of the rapid sales tax growth seen there and in New York City was due to the rebuilding efforts after Hurricane Sandy.
Often, the required reports that industrial development agencies (IDAs) submit to OSC and other agencies are incomplete and inconsistent. Recent audits by OSC have found a lack of documented cost-benefit analysis, lack of recapture clauses in many project agreements and insufficient tracking of projects and their incentives.
Although total local sales tax collections have grown each quarter since the end of the 2008-2009 recession, the rate of this growth has shown a downward overall trend.
