Quantcast

Auditor: One-time tax little help to deficit

He said it was discovered through the audit that the town was raising taxes in the highway fund and financing the highway fund through a sales tax in 2008. Person said that was against New York state regulations.

"Under New York state regulation, if a town has village, or in this case, villages within that town, and that village adopts to collect its sales tax, well then, by law, all sales tax collected by the town must be used only for the benefit of the residents outside the village," said Person. "However, the law, which was changed seven, eight or nine years ago, says that if there's no taxes raised in those town-outside village funds, then that sales tax can be used for townwide purposes."

According to Person, the town had to make an adjustment to their financial books to return the money to the highway fund. He added that the town must merge both the general fund and the highway fund when looking at their finances because they are both governmental funds and are paid for by taxpayer money.

"Keeping these things separate when you're analyzing it," he said. "That causes a lot more confusion when you say, 'This is a deficit.'"

The town has been repaying around $7 million back to the highway fund each year since 2008, which has resulted in a surplus this year in the highway fund. Person said this means the highway fund will not be raising taxes, and the town can use the sales tax revenue to cut into the general fund's deficit. He said that once the surplus is gone in a couple of years, the town may run into a different problem.

"If you don't generate another source of income because that surplus is gone, then you can't transfer the sales tax and will have to raise property taxes," he explained. "Down the road, in probably two years, this is something you'll have to be confronting."

0
Vote on this Story by clicking on the Icon

Comments

Use the comment form below to begin a discussion about this content.

Sign in to comment