ORANGE COUNTY, N.Y.—Orange County’s year-to-date sales tax revenue has performed nearly 10 percent below expectations, according to Kerry Gallagher, county finance commissioner, at the Ways and Means Committee meeting on April 22.
Sales tax is the single largest income for the growing Hudson Valley county, covering more than 40
percent of its budgeted expenses this year.
It also plays a sizable role in the day-to-day operations of 30 or so local municipalities, which share sales taxes with the county at fixed rates. For example, Middletown, the largest city in the county, attributes a
quarter of its annual revenue to sales tax.
“This is not the information that we’d like to project, but this is the actual number,” Gallagher told county lawmakers. “We believe there is a lot of uncertainty right now.”
By April, year-to-date county sales tax revenue came to $5.4 million, or 9.54 percent under budget. Since the county’s sales tax collections from the state usually have a two-month lag, the number largely reflects the county’s sales performance from the past holiday season till February.
Gallagher continued, “We hope that the boat will steer in the right direction, but I don’t see that happening in the next month or two.”
Based on the latest
data from the state Department of Taxation and Finance, top sales tax generators in Orange County are department stores, clothing retailers, car dealers, restaurants, and gas stations, followed by building material dealers and warehouse clubs.
Of the seven Mid-Hudson counties, Westchester had the strongest sales tax growth in the first two months of this year, followed by Sullivan and Rockland; Orange County’s collections largely remained flat, according to a
tally by the state Comptroller’s Office.
Sales tax revenue in the county boomed in the COVID-19 years and contributed to a historic county tax
cut of $9.6 million in 2022 before its pace of growth slowed
down in 2023.
According to a recent
report by the state Comptroller’s Office, the lowered inflation rate was a key factor behind the flattened sales tax across New York state in 2023. After averaging a 40-year high of 8 percent in 2022, the inflation rate dropped to 4 percent the following year.
Orange County has one of the most generous tax-sharing agreements with local municipalities in the Hudson Valley region, based on
data compiled by the state Comptroller’s Office.
The county has a sales tax rate of 8.125 percent, with 4 percent to the state, 3.75 percent to the county and local municipalities, and 0.375 percent to the Metropolitan Transportation Authority; the split between county and local municipalities is about 3:1.
Of locally shared sales tax revenue, about seven in ten dollars goes to towns and villages, with the rest to three cities, Middletown, Newburgh, and Port Jervis.
Correction: An earlier version of this article misstated the amount of the county’s 2022 tax cut. The Epoch Times regrets the error.
