DiNapoli cautious even after sales tax revenue increase

Despite an increase in sales tax growth, the state comptroller is being cautious.

According to a report issued Friday by Thomas P. DiNapoli, local sales tax collections grew by $397 million, or 5.7 percent, for the first half of 2013 compared to the same period in 2012. Much of the growth was focused in regions downstate.

“The growth in sales tax revenue is a promising sign for many communities,” said DiNapoli. “Unfortunately, the economic improvement has been uneven and the trends are headed in the wrong direction for some of our most vulnerable municipalities. Sales tax collections are a vital source of revenue for local governments. Without positive growth during the second half of the year, many local budgets will be under increased pressure.”

DiNapoli’s analysis found that year-over-year growth in sales tax collections was 5.5 percent in the first quarter of 2013 and 5.9 percent in the second quarter.

The gains were driven by especially strong sales tax growth downstate during the first half of 2013. Long Island had 8.5 percent growth in sales tax collections while New York City’s collections increased by 7.5 percent during this period. These increases were likely fueled by cleanup and rebuilding efforts following Superstorm Sandy.

Upstate sales tax collections growth, meanwhile, was considerably slower. The Mid-Hudson Valley (4.4 percent) and Western New York (3 percent) outpaced the growth in Central New York (2.3 percent), the Capital District (1.2 percent) and the North Country (1.1 percent).

Chautauqua County did see a slight increase – under 3 percent – in collections. But overall, the Southern Tier sales tax collection was down 3.1 percent.