By Melissa Scram

Staff Writer

The Otsego County Board of Representatives will consider a resolution Wednesday to raise the county's sales tax 1 percentage point, representatives said.

A second resolution, asking the state to rescind a request to double the county bed tax, will also be placed before the board, according to Rep. Charles Bateman, R-Cooperstown.

If the resolution is approved by the board and the state, sales tax in the county would increase from 7 percent to 8 percent. Four percent of that goes to the state, and a percentage of the remainder is distributed to municipalities within the county, according to Rep. Hugh Henderson, chairman of the county's Budget, Ways and Means Committee.

The increase — expected to generate about $4 million in additional revenue — would help cover increased costs for the county, Henderson said, such as employee wages, an anticipated Medicaid shortfall, and programs that will lose some state aid. The county received about $14 million in sales-tax revenue the previous year, he said.

"I don't think anybody wants to raise the sales tax, but what are we supposed to do?" said Henderson, R-town of Oneonta. "As long as we're mandated to carry out all these programs, it's quite a problem for us."

The county's two major sources of revenue are sales tax and real property tax, said Bateman, a member of the budget committee. By raising the sales tax, he said, the county is able to avoid raising property taxes.

"I talked to the people in my district here and they think this is the smartest thing to do," Bateman said. "They'd rather see a sales tax increase than a real property tax increase."

Bateman added that the board was still looking at ways to restructure the county to save money.

"We could downsize government, but where do we downsize it?" he said. "To cut costs in the county is a very difficult thing to do because people are used to those services and they need those services."

If the resolution is passed by the board, it will go to the state for approval, he said. The committee hopes the increase would take effect Jan. 1.

Henderson said raising the hotel occupancy tax to 4 percent, which the board approved in September, would just have brought in an estimated $400,000 additional revenue, but a benefit is the tax is paid by non-residents.

Rep. Ronald Feldstein, chairman of the county's Intergovernmental Affairs Committee that proposed the increase, said it wasn't appropriate to raise both sales and bed taxes at the same time.

"I think we've got to work with our tourists that come into our county and not fire both barrels on them at once," said Feldstein, D-Otego.

Otsego County collected more than $425,000 in occupancy tax in 2002, County Treasurer Theodora Moore said in February.

Feldstein said some bed tax money, after the first $200,000 that goes to tourism promotion, may have to be invested into infrastructure.

"There will be fewer dollars to spread around to many of the groups in the past that have been recipients of bed tax grants."

John Irvin, general manager of the Otesaga Hotel, said he didn't oppose a sales tax increase as much as he would have opposed a higher bed tax, which he said could drive away group business considering hotels in the area.

"One percentage point, I don't think they'll notice it as much," he said of the sales tax. "We've got counties all over New York state that are higher than we are."

Rob Robinson, president and chief executive officer of the Otsego County Chamber, said raising the sales tax would hurt the county's ability to draw shoppers.

"Right now with 7 percent we have a strategic advantage, a reason people will target Oneonta for their shopping," he said.

Sales tax in Chenango County is 8 percent, and 7 percent in Delaware County.

Bateman said he felt Otsego County would remain competitive.

"We're not out of line —two-thirds of counties in the state are over 7 percent," Bateman said.

Nancy Scanlon, co-owner of Sport Tech on Main Street in Oneonta, said she didn't think the increase would have much of an effect.

"I don't think that people are going to buy less because they have to pay a penny more in sales tax," she said.

Renee Walker, who lives in Morris and teaches at the State University College at Oneonta, said she thinks a 7 percent sales tax is high enough.

"I come from Pennsylvania where it's 6," she said. "So 7 seems high and 8 seems too high."

Oneonta resident Linda Insetta, who said she works for the city's school district, said she'd be in favor of a sales tax increase if it was going to subsidize programs that were going to be cut, such as education, and suggested the county look at restructuring to cut their budget.

When asked if she thought an increase would affect shoppers coming into the area, she said, "not if the parking lot at Wal-Mart on Saturday and Sunday is any indication."

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Melissa Scram can be reached at mscram@thedailystar.com or (607) 441-7213.