October 3, 2007

MILLS, RANZENHOFER, and WEINSTEIN call for the termination of the 1977 sales tax revenue distribution agreement

(Erie County Legislature) Erie County Legislators John J. Mills, Michael H. Ranzenhofer, and Barry A. Weinstein, MD met interested members of the public and press today to discuss their desire to terminate the 1977 sales tax revenue distribution agreement. This agreement was entered into on December 30, 1977 between the County of Erie, the City of Buffalo, the City of Lackawanna and the City of Tonawanda. The agreement determined the distribution of sales tax revenue. Currently, 35.055% goes to Erie County, 29% is shared with school districts throughout Erie County, 10.008% is divided amongst the cities of Buffalo, Lackawanna, and Tonawanda, and 25.6858% is split up amongst the municipalities outside of the cities. The percentage of funds a municipality receives from the agreement is based upon their population, as it was determined by the latest decennial federal census.

The agreement's main purpose was to provide a proper and equitable distribution of sales tax revenue to the Cities, Towns, Villages, and School Districts. However, the agreement was made in 1977 and hasn't been updated since. Since 1977 people and business have made an exodus towards doing business and living in the suburbs. Therefore, due to major shifts in population, increased mandates upon county government, and a loss of retail services and sales in the City, the agreement's intentions are no longer being met.

On April 26, 2006, Legislators Mills, Ranzenhofer, and Weinstein introduced a resolution calling on the Legislature to terminate the agreement entirely, and renegotiate a more equitable sharing arrangement. Legislator Ranzenhofer pointed out that "the agreement states that in order to have a new agreement you need to end the old one. And in order to end the old agreement, the County must give one year's notice." The resolution submitted by the Minority Caucus calls for the year's notice to be given, and begins the discussions to reform the sales tax distribution formula.

The December 1977 agreement provides that the cities, towns and villages use the sales tax revenue to first reduce the County tax levy in their municipality. "The agreement is now outdated, and we need to agree on a new sales tax revenue distribution formula that is more reflective of where people live and work," said Legislator John Mills. "Currently, cities experiencing population declines are receiving approximately $215.00 per capita distribution, while many of the towns and villages are receiving less than $100.00 per capita," said Legislator Ranzenhofer. Mills, Ranzenhofer, and Weinstein believe that the agreement is no longer functioning properly. A properly functioning agreement would honor the agreement's original intentions and more equitably return revenue to where it was raised.

The Minority Caucus resolution introduced on April 27, 2006 was directed to the Finance and Management Committee for further consideration. The item has yet to be considered by the full Legislature. "We are bringing this issue up today because it is a good idea. The Finance and Management Committee has become the graveyard of good ideas," said Legislator Barry A. Weinstein, MD. Republican Legislators are calling on their colleagues in the Legislature to approve their resolution. Approving this resolution will start the required one year's notice required by the agreement, and lead to discussions and negotiations, paving the way for an updated agreement that is fair.

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