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Consumer Slowdown Hits City Sales Tax Receipts

By John Whittaker 3 min read

Retail stores aren't the only ones hurting from a slowdown in consumer spending.

Jamestown officials could be looking at a $545,000 budget hole if sales tax receipts don't pick up in the third and fourth quarters of 2024. Ericka Thomas, city comptroller, told City Council Finance Committee members that sales tax receipts for the first two quarters have come in $70,840 and $189,718 less than budgeted. If the trend continues for the rest of the year the city will end the year $544,643 under budget for the year.

"The next quarter is the biggest one," Thomas said. "That's 27% of the budget."

Chautauqua County's sales tax collections were the same for the second quarter of 2023 and 2024 at $22.7 million, making the county a relative outlier with rural counties in Western New York. Allegany County's sales tax receipts decreased 10.1% in the second quarter of 2024 compared to last year while Cattaraugus County decreased 1.5% year over year. Erie and Niagara counties saw sales tax receipt increases of 3.7% and 1.5% in sales tax revenues year over year. Chautauqua County did see a 4.4% decrease in sales tax collections in June 2024 compared to June 2023, however, as all counties but Erie County saw sales tax receipts decrease in June.

"Growth in local sales tax collections has moderated, as both personal consumption and inflation cooled through the second quarter," DiNapoli said. "New York City was again the largest single contributor to local sales tax growth, and its moderate increase in collections reflects in part a tourism industry that continues to improve."

Over 68% (39 of 57) of counties saw an increase in collections in the quarter, led by St. Lawrence County at 22.5%, and followed by the counties of Livingston (18.5%), Montgomery (12.6%), and Schuyler (11.7%). Allegany County had the steepest decline at -10.1%, followed by the counties of Tioga (-6.7%), Putnam (-6.2%), and Yates (-6.1%).

A majority of cities (13 of 18) outside of New York City that impose their own sales tax experienced year-over-year growth in the second quarter. Ogdensburg had the strongest increase at 17.5%, followed by Johnstown (13.5%) and Saratoga Springs (9.8%). Of the five cities with declines, Salamanca experienced the steepest drop at -14.9%, followed by Mt. Vernon (-14.1%), and Oneida (-2.9%).

A late addition to the Finance Committee agenda is a request to spend $88,000 to cover the final funding for splash pads in Allen and Jackson-Taylor parks. Thomas reminded committee members that the council originally allocated $500,000 to the splash pad project, but $100,000 was removed because grant funding was going to be secured through Assemblyman Andy Goodell, R-Jamestown. That money hasn't come yet, and there are $88,000 in bills waiting to be paid.

"I'm not really sure about the whole grant thing," Thomas said. "That was before my time."

Council members discussed a couple of ways to pay the remaining splash pad costs. Councilman Austin Faulkner, R-Ward 6, wondered if the city could allocate additional ARPA funding and then put money back in the ARPA fund if the state grant money is received. Tony Dolce, R-Ward 2 and council president, suggested using the city's contingency fund and then reimbursing the fund if the grant money ends up being received later.

"I don't recall spending a lot from that," Dolce said. "That would make the most logical sense to just pay it before the grant comes in and if the grant comes in, put it back in there."

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