A Chautauqua County official says lowering the sales tax by 0.25% and lowering its reserves will mean a $6 million impact to the county budget.

On Wednesday, the county legislature will vote on a resolution to both lower the sales tax rate from 8% to 7.75% in 2027, along with lowering the county’s reserves by $2 million.

The proposal to lower the sales tax rate and spend down the county’s reserves was first proposed in January by a couple of Democratic legislators. The legislature voted to have the resolutions sent to committee for further review.

During the legislature’s Audit and Control Committee meeting last week, county Finance Director Kitty Lyons stated that the total loss of revenue would be $3,077,000. Of that amount, $1.8 million would have gone to the county as lost revenue and $1.3 million would have gone to local municipalities as lost revenue.

The resolution that was introduced in January called for more sales tax sharing to local municipalities but didn’t give a specific amount.

Because of this, Lyons said the county would need to provide another $1.3 million to the towns, villages and cities in the county “because that’s how much they would be losing.”

Legislator Tom Nelson, D-Jamestown, asked Lyons if she thinks more people will spend more with a lower sales tax.

“I’ve heard it from Republicans that say if you cut taxes and sales tax, people will spend more,” he said.

Lyons responded, “Based on a sales tax of 8 percent or 7 and three quarters, I can’t say that’s going to generate an incremental amount of new spending. I could be wrong, but that’s my feeling.”

Lyons also noted that in 2027, some expenses will naturally go up from this year.

“That would mean finding $6 million of reductions and appropriations across the county, or additional revenue,” she said.

Lyons warns that can be a challenge to do.

“The county is in the business of delivering services, so in my view, when we’re talking about cutting the budget, we’re talking about reducing services,” she said.

The county has a $35 million reserve fund, however Lyons warned against just relying on fund balance to make up the difference.

“We could be in the position like the city of Dunkirk,” she said, referring to how the city raised its property taxes by 84% in 2025.

Lyons recommends using fund balance for non-recurring expenses.

“If you’re going to use it (reserves) for paying wages every year, at some point you’re not going to have the revenue,” she said.

Legislator Fred Johnson, R-Westfield, said he would like to see the county’s reserves spent down.

“Take the $35 million and let’s give the taxpayers back $20 million bucks right now,” he said.

In that scenario, Johnson said there would be enough of an emergency fund available and then if expenses go up, the county would need to either cut expenses or raise taxes.

“I would rather make the decision to raise taxes today or cut services today than kick the can down the road because we’ve got a gap,” he said.

Legislator Dan Pavlock, R-Ellery, responded that the county has some big capital projects down the road which will need to be funded. He specifically gave the example of the county jail which had a $120 million price tag last year.

When the time came to vote, all members of the Audit and Control Committee voted against the resolution except Nelson, which has already been prefiled for Wednesday’s meeting.