After growing at higher-than-expected rates for two years, Orange County’s sales tax collections lost some momentum at the midpoint of the year.
Covering nearly half of the annual expenses, sales tax is the largest revenue source for the county.
By the end of June, the county had collected $117 million in sales tax revenue, almost equaling the amount that was budgeted, according to data provided by the finance department.
This might signal that the state is on track to return to its pre-pandemic levels, which had an average growth rate of 4.5 percent, the report states.
After the COVID-19 pandemic hit, the amount of sales tax collected by Orange County dropped in 2020, but collections quickly picked up to surpass pre-pandemic levels in 2021.
County sales tax revenue jumped to nearly $278 million in 2022, up by about 25 percent from the amount collected in 2019.
Aside from the county share of the sale tax collections, local municipalities—including cities, towns, and villages—also receive their due shares under a longstanding agreement with the county.
In the Hudson Valley region, Orange County has one of the most generous tax-sharing agreements with local municipalities, according to a tally by the State Comptroller’s Office.
The county charges a total sales tax rate of 8.125 percent, with 4 percent due to the state, 3.75 percent going to the county and local municipalities, and 0.375 percent going to Metropolitan Transportation Authority.
The split between county and local municipalities is about 3 to 1.
Of locally shared sales taxes, about 70 percent goes to towns and villages, with the remainder going to three cities: Middletown, Newburgh, and Port Jervis.
For Middletown, the largest city in the county, sales taxes cover nearly a quarter of its annual expenses.