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Comptroller DiNapoli: higher sales tax receipts not a big step in the right direction

Tuesday, February 21, 2012 - 11:45 AM

New York State Comptroller Thomas DiNapoli has a new report out this morning on sales tax receipts from around the state. The good news is that sales taxes are bringing in more money, especially for local governments.

But as seems to be his want, DiNapoli cautioned yet again that what looks like a step in the right direction should be seen as a baby one--if that.

“The positive growth last year in sales tax collections are a good sign for the economy, but continued caution is warranted,” DiNapoli said in a statement. “New York’s economy has improved over the past two years, but growth has been sluggish and unevenly distributed throughout the state. The degree to which local governments depend on sales taxes varies, but it is an important source of revenue for many. As localities adjust to the property tax cap, more may turn to sales tax revenues to fill in budget gaps.”

Sales tax receipts were up just over 4 percent outside of the city, and just over 6 percent in New York City, from 2010 to 2011.

The Comptroller's office pointed out the significant spending that occurred after the tropical storms that ripped through the state last year as a driver for spending and thus taxes. The city upped its sales tax and started collecting taxes on clothing purchases over $110, according to the Comptroller's office, which help account for the jump there.

To illustrate the uneveness of the tax receipts the report pointed this out:

The strongest growth was in the Southern Tier where purchases of goods and services to rebuild and repair damage caused by Tropical Storm Lee drove an 8.6 percent increase. The weakest growth was on Long Island with a 2.4 percent increase.

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