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Committee backs Home Rule request to formalize sharing 3 3/4% county sales tax with municipalities
Summary
The Rules Committee voted to ask the State Legislature for Home Rule authority to allow Orange County to share 3 3/4% of county net sales tax revenue with towns, villages and cities; county staff said State guidance recently blocked sharing the extra 3/4% unless corrected by law. The committee approved the referral to the full Legislature.
The Rules, Enactments and Intergovernmental Relations Committee voted to ask the State Legislature to grant Orange County Home Rule authority to share 3 3/4% of county net sales tax revenue with local municipalities rather than the 3.0% permitted under current State law. Ms. Kathy Stegenga moved the referral and Mr. Barry J. Cheney seconded; the motion carried unanimously.
Deputy County Executive Harold J. Porr, III said the county has collected 3 3/4% under intermunicipal agreements for decades but was recently notified by the State Controller's Office that the county is prohibited from sharing the additional 3/4% with towns, villages and cities. "As everyone is aware, the County of Orange has a sales tax agreement and collects 3 3/4%," Porr said. Legislator Stephen R. Hunter, who formally presented the policy rationale to the committee, said the proposed Home Rule request would make that sharing official and could include a retroactive request to fully fund municipalities for 2027.
Hunter framed the measure as consumer relief and regional competitiveness, noting neighboring counties have adopted tax caps and that residents may cross county lines to fill up if Orange County does not act. "If we do not follow suit ... we risk losing a lot more money than just the portion being discussed today," Hunter said, adding the county's Finance staff provided an analysis showing an estimated $3.3 million impact over nine months at a $4.00 average pump price, based on assumptions in the Commissioner of Finance's analysis. Commissioner Kerry L. Gallagher and Budget staff participated in drafting the estimate and explained the figure represents projected sales tax revenue forgone under the cap model.
The committee instructed staff to prepare the Home Rule request for referral to the full Legislature; members expressed bipartisan support for the referral and the motion advanced without recorded opposition.
