Ulster County approves five‑year sales tax sharing deal amid town predictability concerns
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Summary
The legislature approved a five‑year sales tax agreement with the City of Kingston by a 16–6 vote after debate over a Medicaid contingency, discretionary 'excess' sharing language and whether to pursue a shorter term. Supporters said it raises the towns' baseline to 3.5%; critics said it leaves ambiguity.
The Ulster County Legislature approved Resolution 6 on Feb. 17 authorizing the chair to execute a five‑year sales tax sharing agreement with the City of Kingston and towns and villages after extended floor debate and a recorded vote of 16–6.
Supporters said the agreement raises the towns’ guaranteed baseline from 3% to 3.5% and establishes a mechanism for towns to share in excess sales tax revenue (up to 12% discretionary allocation). "This new sales tax sharing agreement strikes the right balance," said Legislator Grossman, noting the measure also seeks to protect county fiscal capacity for increasing Medicaid costs.
Opponents, led by Legislator Kovacs, criticized the document's structure and language. Kovacs said the agreement introduces an undefined "Medicaid contingency" and leaves the 12% excess allocation discretionary, creating unpredictability for towns that must adopt annual budgets. "When we draft a 5 year interim municipal agreement involving millions of dollars, we should not rely on post hoc explanations," Kovacs said.
An amendment offered by Legislator Berardi to shorten the agreement's end date from Feb. 28, 2031, to Feb. 28, 2027 — effectively asking for a shorter term to allow further negotiation — was defeated 5–17. Proponents said the five‑year term was necessary to meet an end‑of‑month deadline and to prevent reversion to state default rules that would reduce municipal shares.
The resolution passed 16–6. Supporters said the agreement guarantees a higher baseline for towns, creates a discretionary upside sharing mechanism, and preserves flexibility to revisit distribution rules during the five‑year term. Opponents said they will press for clearer, mandatory language to ensure predictability for municipal budgeting.
Outcome and next steps: Resolution 6 authorizes execution of the sales tax agreement; legal counsel and municipal officials will implement the document and may return to the legislature with clarifying language or home‑rule initiatives if needed.