COOPERSTOWN — Otsego County lawmakers have begun preliminary discussions on whether they should increase the sales tax by a quarter of a percentage point to help plug the budget hole created by the Otsego County nursing home.
The idea is being promoted by Rep. Keith McCarty, R-Springfield, who has opposed a plan to sell the 174-bed nursing home to a private owner.
On Wednesday, Rep. John Kosmer, D-Fly Creek, said he would also support a sales tax increase “if it’s feasible.”
The sales tax idea arose on the heels of an effort by advocates of the nursing home to convince the board to scrap the idea of selling the facility.
Otsego Manor volunteer Maureen Culbert of Springfield presented a petition signed by 1,534 people opposed to the sale of the nursing home. She also urged the board to conduct an analysis on how such a sale would impact patient care, staff and the local economy.
“It is more than a building,” she told the representatives. “It is about the care of our frailest residents, who were also taxpayers and count on you to do what is right.”
Out of the 8 percent sales tax imposed on the purchase of taxable items, half of the revenue goes to the state treasury. Of the other half, the county gets to keep 76 percent, while 12 percent goes to the city of Oneonta, and the remaining 12 percent is distributed to the county’s other municipalities, county Treasurer Dan Crowell said.
If an additional quarter-percentage point were tacked on, bringing the rate to 8.25 percent, the state would not get any of the added amount. The county and the towns would keep all of the new revenue, Crowell said.
Several counties have already increased their sales tax after winning approval from the state Legislature in Albany. More than all surrounding counties, Otsego County derives a higher share of its overall revenue from sales tax, as a result of tourism driven by the National Baseball Hall of Fame and other attractions largely clustered in the Cooperstown area.
Board members have expressed reluctance to enact a budget that goes above the state’s 2 percent property tax cap, saying they want to spare homeowners from escalating property taxes. Part of the tab for a higher sales tax would be picked up by tourists.
Rep. Rich Murphy, D-Town of Oneonta, said the idea for a higher sales tax has appeal but noted: “I’m not sure how logical it is to do it this point” because it would not be approved by Albany in time to build the higher revenue stream into the county budget now being packaged for 2013.
Crowell said county sales tax collections hover at about $34 million a year, and the quarter-point increase would bring in an additional $1.6 million a year to the county. “We have to be cautious in considering this” because it impacts local citizens and because it would not resolve all of the financial problems plaguing the Manor, he noted.
The county subsidy for the nursing home is projected to rise to more than $5 million next year.