Legalizing marijuana for retail sale, broader authority over increasing taxes and sharing in Medicaid cost savings are among the broad measures proposed by county governments to make up for the loss in revenue created by the coronavirus pandemic.
The sweeping proposals made on Tuesday represent a package of measures that would grant county governments broader latitude in their own budget destiny as they face sharp declines in revenue from a range of taxes.
The proposals would allow county governments the permanent authority for local sales tax of or up to 4% and allow them to temporarily increase the sales tax rate for three years by 1%, split evenly between state and county during the pandemic. So-called "gig" industries like AirBnb and VRBO would be subject to local sales tax under another proposal.
And county governments would be given more flexibility to raise tax rates without approval from the state Legislature.
Property taxes would also be affected: One proposal would allow counties to temporarily raise the tax cap beyond the legal threshold without penalty if state aid is reduced by the expected 20% or other county revenues are 95% or less of budgeted estimates.
“With this report we’re sending a message to the state that we’re ready, willing and able to be constructive partners in the economic recovery from the coronavirus pandemic,” said Dan McCoy, the Democratic Albany County executive.
“While these recommendations are a positive step in the right direction, they are no substitute for the federal action that is needed to provide states and local governments with the resources we need to fully recover from this pandemic and get our economy moving again.”
Counties would also share in revenue generated by the legalization of retail cannabis as well as a cannabis cultivation tax that could be shared with county governments if the product is grown there.
Local and state governments around the country have seen revenue declines as a result of the pandemic and the subsequent economic shutdown that halted commerce and largely froze revenues for governments.
Gov. Andrew Cuomo is seeking billions of dollars in aid from the federal government to avoid a mix of tax increases, borrowing and spending reductions.