Sales tax deal reached between city and Schenectady County

The Schenectady City Council narrowly approved a new sales tax agreement with the county at the city's Monday, Dec. 1, meeting, with proponents saying it provides some economic stability for the city and opponents warning that it could prevent the chance for growth.

The agreement, which the Council passed in a 4-to-3 vote, is effective immediately and replaces one written a decade ago that expired on Nov. 30. In the current agreement, the city gives up the right to collect any additional sales tax revenues if the county takes in more than $83.5 million. County officials do not expect to meet that threshold this year.

The new agreement provides the city of Schenectady with a set $11 million each year, as well as $25,000 in sales tax revenues each year for the next four years. That amount is in addition to what the city receives from Metroplex, 30 percent of which is distributed to the towns, which are guaranteed a set $772,064 each year under the agreement.

Under the previous agreement, the towns shared $7.772 million and Schenectady Metroplex received 70 percent of one-half of the sales tax while the other 30 percent went to the towns. After these payments were made, the county collected a tax for itself with a threshold of up to $83.5 million. If the tax exceeded that threshold, the excess would have been distributed to the city, county and towns.

Schenectady County attorney Chris Gardner said he believes the new agreement is fair to the towns, the city and the county.

There's a modest amount of growth, and I think just this past Monday it was officially declared that we have been in a recession since December of 2006, said Gardner, who added that the agreement provides some stability in the face of the unfunded state mandates passed since 2001.

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