Towns, villages would split sales-tax revenue

Putnam legislators on Monday (April 28) discussed a plan to share sales taxes with the county's municipalities - including Cold Spring, Nelsonville and Philipstown - two weeks after County Executive Kevin Byrne outlined a proposal.

Members of the Audit Committee reviewed a proposal to distribute $3 million of $90 million in reserves to aid the county's six towns and three villages. The money, allocated based on population, could be used on infrastructure and capital projects and "essential services," but not payroll.

Legislator Toni Addonizio suggested increasing the outlay to $5 million and allotting the same amount in 2026. She referenced a charge by Cold Spring Mayor Kathleen Foley that Putnam was "hoarding" money. "We don't want to hoard money; we want to give it out," said Addonizio.

Putnam's surplus, including savings allocated to expenses, hit $134 million this year, a level which Legislator Paul Jonke called "obscene." Michael Lewis, the finance commissioner, said Monday that unspent funds from unfilled positions and inflation-driven increases in sales-tax revenue fueled the surplus.

Legislator Greg Ellner said that Putnam's next annual audit, when released, will show another $8 million to $12 million in the surplus.

By sending some of that money to municipalities, Putnam would join 50 of the state's 62 counties that share revenue. Dutchess, for instance, distributes 2.35 percent of sales taxes collected to Beacon, 5.41 percent to the City of Poughkeepsie and 9.5 percent to its towns and villages.

A proposal unveiled by Byrne on April 15 and endorsed by the municipalities would share one-ninth of the 1 percent of sales-tax intake, which would have amounted to about $2.3 million based on 2024 revenue. It would take effect only if the state passes a pending bill allowing Putnam to continue collecting 4 percent, which it has done since 2007 when the state permitted the county to raise its rate by 1 percent.

The 4 percent rate has been repeatedly extended but expires on Nov. 30. State lawmakers must pass another extension before the end of the current session on June 12 or the rate will revert to 3 percent. The total sales tax in Putnam is 8.375 percent, which includes 4 percent for the state and 0.375 percent for the Metropolitan Commuter Transportation District.

Legislator Nancy Montgomery, who represents Philipstown and part of Putnam Valley, said she likes Byrne's proposal because it is based on sales-tax revenue. If the county came to a point "where we have no fund balance," the money would not be distributed.

Montgomery, who once proposed a plan in which the municipalities would receive 50 percent of sales taxes over the amount budgeted, offered several amendments to the Audit Committee resolution: (1) that Byrne be involved in crafting the agreement, (2) that municipalities be allowed to spend on personnel "tied to short-term and public needs" and (3) that it include reporting and audit requirements.

"While I appreciate the efforts in including our municipalities in the resolution that you wrote, I think it requires a lot more," she told her colleagues. "I really wish you would have considered my resolution."

Foley, who was at the meeting, also expressed concerns, including that the proposal does not establish a minimum amount that municipalities would receive. Byrne's plan guarantees each town and village at least $50,000, a commitment particularly important for Nelsonville, whose 600 residents make it the county's smallest municipality.

Foley called for assurances that revenue-sharing would continue beyond next year, such as the long-term agreements Dutchess and other counties have in place.

Because of the surplus, the Legislature voted last month, 5-4, to ask the state to allow the county to lower its sales-tax rate to 3.75 percent, but Byrne vetoed the resolution and proponents did not have the six votes needed to override. The county executive cited the loss of a...