$40,000,000.00 Game Of Chicken

Tonight, 5/19/2025, the Putnam County Legislature will hold a special full legislative meeting to have an up or down vote on what is known as a “Home Rule” request regarding the Sales Tax.

What Does That Mean?

Essentially, going back to February, Putnam County has been having a back and forth with itself over how to address the county portion of the sales tax for the next 2-3 years. Every 2-3 years this must be addressed by Putnam County. Once the county agrees on what it wants its Sales Tax rate to be, it then sends a request to the New York State Delegation in the both the Assembly and the Senate to adopt its request of both a rate, and a time period (2 or 3 years).

Once the state delegation puts a bill together, the county than takes an up or down vote to accept it or deny it. This year the choice is between 3% or 4%. In dollars, that is a difference of around $40,000,000 over tow years in revenue for the county. Revenue that makes projects like Think Differently possible.

For years this has been quite straight forward. This year, however, that has not been the case.

Why Not?

Back on February 12th, every mayor and town supervisor in Putnam County signed on to a letter to the Putnam County Legislature requesting they keep the current county rate at 4%, where it has been for years. They stated that doing so would allow the excess sales tax revenue that the county has collected (notably from businesses in these very towns) to be redistributed back to the local towns and municipalities to aid in their very limited budgets. This was something District 1 Legislator Nancy Montgomery (D, Philipstown) has suggested for years.

This is so when needed infrastructure projects come up, they can pull from these funds and limit the tax burdens to their residents on property taxes, which from the town, are significantly higher than from the county.

On February 19th, I attended a legislature meeting, along with Putnam Valley Town Supervisor Jackie Annabi, and spoke to the good redistribution of these surplus funds could do, especially for massive infrastructure projects such as in Water District 2, here in Carmel Hamlet.

So, What Is The Issue?

The County Legislature was split on whether or not this was the best use of the surplus funds they have collected over at least the last 4 fiscal years. There was also some question as to whether or not County Executive Kevin Byrne would sign off on such an arrangement, something he had been hesitant to do in the past.

This escalated at a March legislative meeting when District 5 Legislator Greg Ellner from the floor introduced a sales tax cut that had not previously gone through committee. Due to it not having been vetted it was voted down. He then introduced a second sales tax cut, which also was voted down since it had not been vetted.

I then spoke to the Legislature and tried to impart the wisdom of “not falling in love with your own idea” so much so that you lose sight of a better one. Cutting the sales tax a quarter of a percent is essentially meaningless to tax payers. It equates to roughly between $35-$50 a year per resident, perhaps less because sales tax is the only tax also paid by non-residents.

Cutting the Sales Tax rate from 4% would make, according to the Town Supervisors and Village Mayors, a redistribution plan unsustainable for the long term.

County Executive Strikes a Deal

In April, District 6 Legislator Dan Birmingham introduced his own Sales Tax Cut to 3.75%, from 4%. Again, this felt to be performative in the sense that this would not provide actual meaningful relief, in my opinion, to tax payers, but could throw a lot of funding doubt on programs the county offers. So at April’s FULL legislative meeting I spoke to the legislature and the people in a speech that echoed what I had begun to see as an emphasis on political gamesmanship over meaningful service to the people.

A few days later the County Executive announced a compromise he reached with all of the town supervisors and village mayors that would allow for a redistribution plan of excess revenue collected from Sales Tax. He explained that this could only happen if every town supervisor and village mayor signed on, which they have, in a bipartisan, unanimous way.

They have.

Legislature’s Response

While this deal was welcomed and agreed to in a unanimous and bipartisan away, it was not agreed to with the budgetary decision makers: the county legislature.

It is important to note that while the Legislature has republicans sitting in eight of its nine seats, there is a fracture that prevents them from working together on many important issues such as this one.

A majority of them did not want to over excess sales tax funds back to the town supervisors, but did offer something in a counter to the deal they made with the County Executive: $5,000,000 a year distributed based on population to each town and village, for two years, which would me more than each town would get from the deal with County Executive Byrne, combined with a sales tax cut to 3.75%.

The sticking point for the Supervisors and Mayors is that it would not be sustainable and that there were no assurances after the two year period.

Bypassing the Legislature

The underlying challenge is the tight deadline this needs to be resolved by for the state, as this is a part of the New York State budget. With that in mind, the County Executive went right to the state delegation so that they had something to put int heir budget from Putnam County. It was the 4% along with the redistribution plan.

With the county legislature unable to come to an agreement, with themselves or with the Town Supervisors and Village Mayors, the state has acted and forced their hand.

Up or Down for $40,000,000.00

With the state delegation having passed this on their end, it now comes to the county legislature for an up or down vote. If the legislature votes it down, the sales tax rate will revert to 3% flat, with no in between. This will be a loss of $40,000,000.00 in revenue for the county and could put significant programs in jeapordy.

It seems unthinkable that it would get that far, but this right now feels like a game of chicken. At this stage, I support keeping the sales tax rate at 4% and finding ways to keep tax dollars local, something that has been a part of my platform since the beginning.

This game of chicken has gone on long enough and is another example of how destructive this fracture in our county government can be. Again, not a party issue, 9 of the 10 players are in the Republican Party. This is an ego issue and how our elected officials have forgotten what is most important is not scoring political points, but securing wins for the people.