By Holly Crocco
Putnam lawmakers are considering lowering the county sales tax rate to provide some relief to consumers.
Legislator Dan Birmingham, R-Brewster, said the county can save consumers $11 million annually by lowering its sales tax rate by half a percent, from 4 to 3.5 percent, and that it’s in a comfortable enough position to afford to do so.
“Over the last five fiscal years, the county government has collected over $400 million in sales tax revenues – $53 million higher than what was budgeted,” he said. “Let’s lock in these surpluses now and give the money back to the taxpayers through a lowered sales tax rate.”
According to the most recent audited results, Putnam’s total fund balance currently sits at over $140 million, explained Birmingham.
“Due in large part to the recent increases in sales tax revenues, such fund balances have more than doubled over the last five years,” he said. “While it is always prudent to have a healthy fund balance, there comes a time when we must realize that such an excess of idle and available cash may cause politicians to dream up new ways in which to spend such money.”
The sales tax rate in Putnam is currently 8.375 percent, broken down as follows: 4 percent is allocated to the state, 4 percent to the county, and 0.375 percent to the Metropolitan Transportation Authority.
Towns and villages do not receive any of the sales tax revenue.
One percent of the county’s 4 percent sales tax allocation is considered an “add on” and must be approved by the state every two years, with the approval coming up again in November.
While Birmingham voted in favor of the added 1 percent sales tax when he sat on the Legislature in the earlier 2000s, he said times have changed.
“Unlike 2005, when we were in dire straits financially and budgetarily, here in 2025, we’re carefully managing a very large surplus,” he said.
Legislator Greg Ellner, R-Carmel, who voted in favor of the extension in 2023, is not only advocating for the reduction, but even a more aggressive one than Birmingham proposed – a full 1 percent.
“The whole problem with this type of legislation is, once you get it, you rely on it,” he said at the County Legislature’s Jan. 27 Audit Committee meeting. “I think that will force judicious management. People are going to have to really respect their budgets and do what’s necessary. Is it going to be challenging? Yes. But what are we supposed to do? I want to give tax relief to everyone.”
Further, Ellner said the tax reduction could lead to increased spending. “The other part of it is, if you have more money in your pocket, now you have more money to spend,” he said.
Commissioner of Finance Michael Lewis expressed concerns about forfeiting the extra 1 percent, which he said is the equivalent of giving up $22 million in revenue for one year – almost half of the county’s tax warrant.
“I don’t know if you bounce back from getting rid of $22 million in one year,” he said.
Over the past couple of years, Lewis said the county has been putting some of the surplus money into “assigned pots,” such as a capital reserve to go toward infrastructure projects so the county doesn’t have to go out to bond.
Over the past two or three years, the county has invested almost $14 million into capital infrastructure, and saved between $3 million and $4 million that it would have incurred in borrowing costs over the 20-year lifespan of the bond. Further, Lewis said the county has debt services costs to consider, as well as contractual agreements, and mandated costs like health insurance and employee retirement.
In addition, the change in administration at the White House may impact the economy, said Lewis.
“Who knows what’s going to happen?” he asked. “If inflation goes down, which is a good thing, the flip side of that is we’re not going to get the sales tax like we have the past few years.”
Legislator Erin Crowley, R-Mahopac, said the topic warrants further discussion, saying she would hate to see salary adjustments or a hiring freeze, or the county’s borrowing power impacted.
“I want to see taxes go down for everybody, but these are certainly real things that I think we need to take into consideration,” she said. “We’ve seen over the past couple of years people really struggling, and our county has been bountiful and we’re thankful for that.”
Legislator Nancy Montgomery, D-Philipstown, who has voted against extending the added 1 percent sales tax every time his has come before her, noted that the initial resolution asking for the addition was written when the county wasn’t seeing a sales tax revenue overage.
However, since 2019, the county’s sales tax revenue has come in over-budget, by between $7 million and $17 million each year.
“So, we’re over-budget every year – our sales tax revenue just keeps going up,” said Montgomery. “I know that can change with inflation, and it will, but as sales tax grows, property taxes should decline.”
Further, Montgomery noted that her district – which includes the Village of Cold Spring – generates a large portion of the county’s sales tax revenue because it is a tourism hub, and yet her district doesn’t receive any added support to handle the impact on infrastructure, public safety, and the environment that comes with an influx in visitors.
She said Putnam is one of only a handful of the 62 counties in New York State that doesn’t share its sales tax with municipalities.
“We’re contributing quite a lot,” said Montgomery. “Your county funding that supports county tourism pushes tourism on my district and offers no relief whatsoever, despite requests from our mayor, our supervisors, and honest to goodness pleas for help… We have to clean up garbage from the tourism you generate income on.”
Legislator Bill Gouldman, R-Putnam Valley, said he would rather see a reduction in property taxes.
“Generally in New York State, we are overtaxed,” he said. “Whether it’s a fee, a levy, a toll, an assessment, a contribution, or congestion – which New York City has just put in place – we’re paying too much to live here in New York… The area I represent in Putnam Valley, no one discusses with me that the sales tax is too high. The discussion is the property taxes are too high.”
Gouldman said residents in his district don’t even shop in Putnam. Instead, they go over the county border to Yorktown, Somers, and Cortlandt. “So lowering the sales tax really wouldn’t do anything for the residents in Putnam Valley,” he said. “Lowering the property taxes is really what should be done.”
Legislator Paul Jonke, R-Southeast, countered that the portion of a resident’s property tax bill that goes toward the county is minute compared to the town and school taxes.
“It’s been two years that we’ve given tax relieve to the property taxpayers of the county (through a reduced budget),” he said. “I think now it’s time that, for those people that don’t pay property taxes, they get relief when they go buy a car, when they got to a restaurant, when they go online to shop – they get immediate relief… We have the money to cover it.”
Further, Jonke pointed out that his district houses three car dealerships, as well as the Highland Shopping Center that includes Kohl’s, Home Depot, and other popular stores. “Never once did I say I should get more money because of all the sales tax my district generates,” he said. “We’re all in this together.”
Legislator Amy Sayegh, R-Mahopac Falls, pointed out that the county has benefited from the “Wayfair Decision” in 2018, giving the county the ability to collect sales tax on online purchases, such as through Amazon.
“Anytime we can save the taxpayers money, I think we should,” she said. “Maybe not 1 percent, maybe a quarter of a percent and see how that goes for a few years.”
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