Hornell expected to eclipse Corning in sales-tax revenue

Bob Clark

Could Hornell be the biggest shopping center in Steuben County?

If comparing sales tax figures is any indication, it’s certainly a possibility in the near future.

In Corning — the only other city in Steuben County — a much-larger property tax base is used to balance a larger budget, according to Mayor Tom Reed, but the national fiscal crisis could rear its ugly head in the Crystal City.

Sales taxes make up a smaller percentage of Corning’s revenue than in Hornell, but historically, Corning has made more in sales taxes than the Maple City. Corning officials budgeted $3.19 million in their 2008-09 city budget, while Hornell budgeted $2.84 million in the same year, according to officials in both cities.

That ratio is expected to swing the other way this coming fiscal year.

According to Hornell Mayor Shawn Hogan, that gap has closed and Hornell is expected to bring in more sales tax funds in the 2009-10 budget year than Corning. Hogan budgeted $3.03 million in sales taxes for the 2009-10 budget.

“There were times when that revenue was in the $500,000 range,” Hogan said, adding high sales tax figures did not come into the city’s budget equation until recently. “That didn’t start until the advent of the Hornell Plaza.”

Hogan said the city’s sales tax figures show upwards of $158 million in taxable sales, with an estimated $60 million coming from the Hornell Plaza’s biggest tenant, Wal-Mart.

Projected sales tax figures for in the 2009-10 budget year in Corning were not available, Reed said, as that city’s budget is not due until June 30, but Reed did say a decrease in sales taxes for Corning is likely with the economy, which could potentially lead to adding on to the city’s $22.68 million debt load.

“The City of Corning has a long history of borrowing by bonding,” he said.

Even as sales tax revenue sags in Corning, at least $442.7 million in taxable property in the city has been the primary source of income for the city.

Corning raised $4.74 million in property taxes in the 2008-09 budget, while Hornell raised $2.65 million. Even though more came in from property taxes, individual taxpayers see lower city taxes in Corning than in Hornell.

In the 2008-09 Corning budget, taxpayers saw a tax rate of $9.32 per $1,000 of assessed property value. By comparison, Hornell residents saw a tax rate of $11.90 per $1,000 of assessed value — a $129 tax difference on a $50,000 property.

While Corning relies more on property taxes, Olean city officials see an almost-equal importance in sales taxes and property taxes.

Olean — with around 6,000 more residents than Hornell — raised $4.82 million in property taxes and $4.06 million in sales taxes in the 2007-08 city budget, according to the state Comptroller’s Office.

“We plateau for a while,” Olean Mayor David Carucci said, but a new ball bearing factory, expansions at Dresser-Rand and new retail establishments in the city limits are helping the city’s economy greatly. “We have all kinds of jobs available right now.

Olean faces unique problems, Carucci said, including trying to reign in a very large deficit created by borrowing funds for operating expenses and general mismanagement.

“I inherited a city that was $4.3 million in the hole,” he said, adding the state Comptroller’s Office conducted an audit and is reviewing all city budgets for the next few years.

Now, that debt load is down to around $910,000, which could be eliminated in another four years, Carucci said, but the taxpayers have had to bear a large portion of that burden.

“We had three double-digit (tax increase) budgets in a row,” Carucci said, adding city residents will likely see around a 9.8 percent tax hike this year.

Olean raised $4.82 million in property taxes and $4.06 million in sales taxes in the 2007-08 city budget, according to the state Comptroller’s Office.

Cuts in costs also have been responsible for bringing down the debt, Carucci added.

In the 2007-08 fiscal year, the city budgeted $20.13 million in expenditures, while the current figures for the 2009-10 budget show around $15.75 million.

The Evening Tribune