Putnam County is one of about a dozen counties in New York that still doesn’t share its sales tax revenue. The total sales tax rate in Putnam County is 8.38 percent, and the county’s share of that is 4 percent — a figure that must be regularly approved by the state. Earlier this year, the Republican-controlled county legislature voted 5-4 to ask the state to lower the rate to 3.75 percent, as a give-back to taxpayers.
But Byrne, also a Republican, vetoed that resolution.
“While we might be able to do it in the short-term, in the out years you create an issue where we are then going to inevitably have to rely more on property taxes," he tells WAMC. "I very much opposed reducing the sales tax rate, because I want to prioritize property tax relief.”
Putnam County has amassed a general fund surplus of roughly $90 million. Byrne says that's partially because of the sales tax: the county pulled in about $85 million in revenue last year. The calls for cuts come at a time when lawmakers are trying to provide economic relief and — depending on who you ask — plan for broader economic uncertainty. Next door, Westchester County says it is projected to face a more than $24 million budget gap for 2025 due to declining sales tax revenue.
The Putnam County legislature didn’t have enough votes to override Byrne’s veto, and without a bill for state lawmakers to pass by the end of the legislative session in June, the county rate would automatically expire and drop to the default 3 percent after November 30.
Byrne says he met with local and state lawmakers, including Democratic State Senator Peter Harckham and Republican Assemblyman Matt Slater, to come up with a deal: the county will keep the same 4 percent rate for another two years in exchange for sharing one-ninth of that one percent difference with municipalities, to use in capital projects.
“I committed, as county executive, that if everyone came on board and did this, I would introduce the largest property tax cut in Putnam County history," adds Byrne. "And that, with the revenue that we would retain from sales tax, I would cut the property tax levy by at least $1 million.”
The deal got a unanimous thumbs up from town supervisors and mayors, like Putnam Valley Supervisor Jacqueline Annabi. Speaking at a recent press conference in Kent, the Republican says towns don’t have many ways to fund infrastructure improvements. Under the deal, each town would be guaranteed at least $50,000 a year.
“The money that we could be getting would be less that we have to hit you with, when we want to repair the potholes, when we want to build something for our seniors," said Annabi.
The county legislature voted 7-1 to approve the deal in a special session last week. Democratic Legislator Nancy Montgomery initially supported cutting the sales tax, but changed her mind.
“We’ve created a lot of uncertainty in the last five months for our towns and villages, for our departments and the people we represent. But through it all, I haven’t heard one single constituent ask us to lower the sales tax," said Montgomery. "What I have heard loud and clear is, 'Stop the back and forth. Stop the chaos and work together.'”
Republican Legislator Daniel Birmingham abstained from voting, as his law firm represents three communities that would benefit from the deal. The only member to vote against it was Republican Legislator Paul Jonke, who maintained more residents would benefit from a sales tax cut than a property tax cut.
“The largest beneficiaries of a property tax reduction? Number one is the City of New York. And right down the list, it’s utilities, it’s municipalities, it’s the state of New York," said Jonke. "And the resident that we’re all concerned about — I’ve heard everybody talk about the residents — their benefit on a million-dollar property tax levy reduction, on average, would be about $25."
Speaking with WAMC, Republican Legislator Erin Crowley says she is happy about the deal. She was against cutting the sales tax from the beginning, and she’s excited to see what towns do with the money.
“In the town of Carmel, there’s a huge water district issue, and this would give them the ability to help with their water district project, where they need a new water treatment facility," says Crowley. "I think it’s really important that we’re giving back to the residents and really supporting them.”
The deal still needs approval from the state legislature. If approved, it would take effect December 1. Byrne is expected to propose his 2026 budget in the fall.
