Elliott Auerbach, Comptroller 244 Fair Street Kingston, NY 12401 845-340-3529

Office of the Ulster County Comptroller ULSTER COUNTY NON-PROPERTY TAX AND FEE REVENUE ECONOMIC INDICATORS REPORT

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___________________________________October 7, 2013___
included in this category are taxes received from the sale or lease of vehicles, reported by the Ulster County Clerks Office. License and Permit Fees: This category includes fees collected by both the Ulster County Clerks Department of Motor Vehicles (DMV) and the Ulster County Health Department. Revenue from the DMV is derived from motor vehicle licenses and operator licenses which consist of fees for original licenses and permits, renewals, duplicates, and amendments to licenses and permits, as well as license reciprocity fees. Additional permit and fee revenue is received from registration, renewals and duplicates of registrations, CDL and non CDL permits, and CDL written and skill testing fees. The category of All Other Licenses is reported to our Office by the Ulster County Health Department, which records revenues earned on permit and licenses fees from sources such as food service, temporary residence, mobile home parks, swimming pools, bathing beaches, childrens camps, farm labor camps, public water supply plan review, realty subdivisions, sewage disposal systems, public sludge and refuse disposal permits. The permit that generates the most income in this category is the food service permit and is required to be renewed annually during the first quarter. Deed and Mortgage Taxes: The revenue reported by Ulster County in this other nonproperty tax category, is generated from fees collected by the County Clerk in connection with the recording of deed and mortgage documents.

Ulster County Participation in U.S. Census Bureau Analysis

Ulster County is one of the 3,000 local governments out of 89,000 to volunteer its revenue data to the United States Department of Commerce. The reported revenue figures are collected from the Ulster County Finance Department, Health Department and Ulster County Clerk. This information is then compiled and reported quarterly by the Ulster County Comptrollers Office to the U.S. Census Bureau, which aids the Bureau of Economic Analysis to develop estimates of the Gross Domestic Product of our Nation, a key economic indicator. Our participation aids in effectively analyzing various data pertinent to the economic health of our County. The focus of this Report is on the reported non-property tax revenue and fee revenue generated by Ulster County.

Non-Property Tax Revenue Generators

Historically, the most predictable source of revenue for municipalities has been generated through real property taxes. With the enactment of the property tax cap, municipalities have focused their attention on other sources for generating revenue. Revenue can be produced from various other categories, such as: sales tax, license and permit fees, and other non-property taxes.

What are the Sources of Non-Property Tax Revenue?

Aside from real property taxes, the other main categories from which revenues can be generated are described below and detailed in Table 1. Sales Taxes: Ulster Countys largest revenue generator is sales tax. This revenue is derived from general sales tax and the gross receipt taxes. These include sales and use taxes on general purchases, hotel and motel bed tax, and off track betting tax revenue, as reported by the Ulster County Finance Department. Also

Table 1: Ulster County's Collection of Non-Property Taxes for the 2012 Calendar Year by Quarter

Category
General Sales & Gross Receipt Taxes (U.C. Finance Deptartment) Sales Taxes General Sales & Gross Receipt Taxes (U.C. Clerk) All Other Sales & Use Taxes Motor Vehicle Licenses & Motor License & Vehicle Operators Licences Permit Fees All Other Licenses Other Deed & Mortgage Taxes

Jan 1 - Mar 31

April 1 - June 30

July 1 - Sept 31

Oct 1 - Dec 31

2012 Totals $ 108,260,248 1,697,190 1,264,372 6,239,907 423,238 6,651,640 $ 124,536,595 $

Quarterly Averages 27,065,062 424,298 316,093 1,559,977 105,810 1,662,910

27,201,944 369,500 206,728 1,549,000 184,238 1,324,900

26,782,626 480,224 197,399 1,658,640 73,263 1,870,457

24,138,278 462,765 509,270 1,542,083 76,697 1,807,343

30,137,400 384,701 350,975 1,490,184 89,040 1,648,940

Totals $

30,836,310

31,062,609

28,536,436

34,101,240

How Much Revenue Does Ulster County Generate From These Sources?
In 2012, Ulster County reported over $124 million from these sources of non-property tax revenue. This figure includes all categories of reported tax, license, permits and fee revenue, which averaged about $31 million per quarter. As detailed in Table 1, the fourth quarter of 2012 had the greatest revenue generated, assumed to be directly correlated to the holiday shopping season, where sales tax earned over $30 million. Conversely, the third quarter of 2012 had the lowest revenue generated over the trend period, earning between $2 million and $5 million less than the other quarters. Since January 1, 2012, general sales and gross receipt taxes, paid by consumers on everyday purchases, and reported by both the County Clerk and Finance Department, generated the most revenue for the County. General sales and gross receipt taxes has accounted for about $110 million, (99%) of sales tax revenue. The category of All Other Licenses details the revenues reported by the Health Department, which reportedly earned $423,238 in revenue for Ulster County in 2012. This category has historically generated the most revenue during the first quarter of each year, and as a result, $104,571 of excess revenues was earned during the first quarter of 2012 when compared to the second through fourth quarterly average of $79,667; this may be correlated to the annual renewal of the food and service permit. Additionally, the revenues collected through deed and mortgage fees resulted in over $6 million in total revenue during the four quarters reviewed for 2012. Combined, these two categories of revenue generated roughly 11% of the total reported non-property tax and fee revenue for 2012. The trend of the quarterly revenue data can be seen in Chart A.

Chart A: Quarterly Trend of Non-Property Tax and Fee Revenue

Total Taxes & Fees Collected by Quarter

$35,000,000 $34,000,000 $33,000,000 $32,000,000 $31,000,000 $30,000,000 $29,000,000 $28,000,000 $27,000,000 $26,000,000 $25,000,000

2013 Tax Revenue Comparison

Table 2 shows non-property tax revenue earned for the first half of 2012 compared to 2013. As shown, non-property tax revenue generated nearly $1.3 million less in the first half of 2013 than in the first half of 2012. The largest percent decrease is seen in the category of licenses, permits and fees. The overall collection deficit attributed to this category is almost 6% less than the first half of 2012. However, the largest dollar decrease can be seen in the category of sales tax revenues, which declined nearly $1.5 million, or 3%, during the first half of 2013. The decline in sales tax revenue as well as license, permit and fee revenue is of concern to our Office as these are sources of revenue on which Ulster County relies in order to provide resources to its residents without having to increase property taxes. Though the tax revenues earned through deed and mortgage taxes saw a 12% increase the first half of 2013 compared to the first half of 2012, which may be an indication of an increase in real property purchases, the increase does not replace the overall losses in the other categories of nonproperty tax revenue.

Table 2: Ulster County Comparison of Non-Property Taxes between the First 6 Months of 2012 and 2013

Category
General Sales & Gross Receipt Taxes (U.C Finance Department) Sales Taxes General Sales & Gross Receipt Taxes (U.C Clerk) All Other Sales & Use Taxes Motor Vehicles Licenses & Motor License & Vehicles Operators Licences Permit Fees All Other Licenses Deed & Mortgage Taxes Other

2012
Jan 1 - June 30

2013
Jan 1 - June 30

6 Month Period $ Change % Change $ (1,555,710) -2.66% 6,205 82,763 (202,011) 6,522 384,686 $ (1,277,545) -5.64% 12.04%

$ 53,984,570 849,724 404,127 3,207,640 257,501 3,195,357

$ 52,428,860 855,929 486,890 3,005,629 264,023 3,580,043 $ 60,621,374

Totals $ 61,898,919