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Winning the Battle, Losing the War: How Sales Tax Renewal Thwarts Constitutional Home Rule August 2017

Winning the Battle, Losing the War: How Sales Tax Renewal Thwarts Constitutional Home Rule

Gerald Benjamin, SUNY New Paltz

On March 27, 2017, the Ulster County legislature unanimously passed Resolution 97 authorizing its chairman “… to request the New York State Legislature to commence the process of extending the Ulster County additional sales tax rate of one percent … for at least the twenty-four month period commencing December 1, 2017.” At stake: estimated annual revenue of $23.8 million for the county, $3.2 million for the city of Kingston, and $835,000 for the county’s towns. For the county and the city, these are big numbers. The potential loss of this revenue if the additional taxing authority were not extended would leave a gaping hole in annual operating budgets.

The county’s request was forwarded to eight state legislators with some part of Ulster County in their districts: Senators George A. Amedore, John J. Bonacic, William J. Larkin, Jr., and James L. Seward; and Assemblypersons Kevin A. Cahill, Brian D. Miller, Peter D. Lopez, and Frank K. Skartados. In response, Senator Amadore introduced a bill (S5568) on April 13, 2017, and Assembly Cahill introduced a companion bill (A7409) on April 25, 2017, as requested, to extend additional sales tax collection authority for another two years.

Shortly thereafter, the Ulster County Legislature in Kingston passed a second resolution (Resolution 222) specifically requesting enactment of the Senate and Assembly bills. The county legislature is closely divided politically, but again sponsorship was bipartisan, and the vote was unanimous. County Executive Michael Hein signed off immediately, and the results were sent to both state legislative houses the next day.

Article IX of the New York State constitution, resulting from a century-long struggle for autonomous local governing authority, or "home rule," has two broad categories of provisions, sometimes described as localities’ “sword” and their “shield.” The “sword" is made up of powers guaranteed in the constitution to counties, cities, towns, and villages — New York’s general purpose local governments. These cannot be taken away by the state legislature, or that’s the idea. The “shield" is made up of protections for these localities from state legislative imposition, or that’s the idea. In fact, constitutional choices, legislative assertion, and judicial interpretation have diminished the strength of both the sword and the shield.[1]

The home rule (“sword-like”) powers constitutionally guaranteed to general purpose local governments does not include the power to tax. This power is reserved to state government. Every dollar counties collect, from whatever source, must be explicitly authorized by the legislature. As Judge Sheila Abdus-Salaam reaffirmed in a 2014 decision of New York’s high court, the Court of Appeals: "The power of taxation, being a State function, the delegation of any part of that power to a subdivision of the State must be made in express terms [and] cannot be inferred."[2]

The legislature has specified that general sales taxes in New York may be levied by cities and counties only. Not by towns; not by villages; not by school districts. Without special authorization, the combined local sales tax rate cannot exceed a maximum of 3 percent.

Not all counties have cities within them. For those that do, the law provides also that if a city first imposes a sales tax, and the county later enacts one, the county must preempt half of the city’s tax, and vice versa.[3]

Additionally, counties and or cities may get special state authorization to levy a sales tax at a higher rate, the proceeds of which — in accord with local agreement or the terms of state law — may, or may not, be shared in the same proportions as the revenue from the initial 3 percent. This authorization has been given by the state on a county-by-county basis, subject to periodic renewal.[4] A 4 percent sales tax, subject to periodic reauthorization, has been in place in Ulster County since 2002.

Here’s where the home rule “shield” comes in. One way the New York constitution seeks to protect localities from unwanted state intervention in their affairs is to provide that the state legislature "… Shall have the power to act in relation to the property, affairs or government of any local government only by general law, or by special law only … on request of two-thirds of the total membership of its legislative body or on request of its chief executive officer concurred in by a majority of such membership …" (Article IX.2.2.a). Ulster County’s Resolutions 97 and 222 constituted the required “home rule message” asking the state government for a special law to extend its sales tax for another two years.

There is an informal norm of mutual deference among state legislators — sometimes called “logrolling” — regarding matters of solely local importance. “If it’s in your district and you support it then I will vote for it, and I expect the same from you.” This norm gives a senator or assemblyperson significant local power, the opportunity to block the passage of something a local government back home wants, unless some condition he or she sets out is met. Thus, this element of the constitutional home rule shield is transformed from a barrier to unwanted state intervention in local affairs to a path for power-sharing between local governments and local-based state legislators on matters of local importance. Because reauthorization of additional sales tax authority is periodic, chances for the potential use of this path regarding this taxing authority regularly reoccur.

Historically, when it comes to sales tax extenders, assemblypersons and senators have sometimes used this power to affect how the revenue to be gained is shared, and/or how it is spent. They may wish to enhance the share of the sales tax that goes to a city or cities. They may want jurisdictions that rely on the property tax but cannot levy the sales tax — school districts, towns, villages — to share in the proceeds. They might want the proceeds generated by the added rate tax to be spent on a specific purpose — e.g., to meet Medicaid costs.

At first look, requiring Ulster to adopt two local resolutions to get the state to take a single action seems excessive. But having two resolutions — one general, one specific — for sales tax extenders makes sense in the real upstate political world. The first resolution starts the conversation. The second documents the outcome of the power-sharing negotiation.

Local state legislators may be willing to sponsor a local government’s request unconditionally. Case closed. Or they may specify the conditions under which they are willing to do so through informal agreement — a handshake or purely local government actions — or inclusion in special state legislation. Passage of a second resolution addressing a specific bill that encompasses the results of these negotiations seals the deal; it makes sure, if necessary, that both the local government and the state legislators are getting what was agreed upon, with no conditions except those mutually accepted.

In 2013, Ulster County’s additional 1 percent sales-taxing authority lapsed briefly, with several million dollars of revenue lost, as the result of a bitter fight between Kevin Cahill, a senior upstate Democrat from Kingston, and Ulster County Executive Mike Hein, also a Democrat. Cahill sought to condition his sponsorship of the needed special legislation on the inclusion of a provision in it requiring that the county government immediately assume certain social service “safety net” costs. (Ulster was the only county in the state that still passed the payment of these costs along to its city and towns.) The bill that finally passed early in 2014 specified full county assumption of these costs by 2015.

Ulster County is not alone in requiring regular reauthorization of sales tax extenders. Only four New York counties outside New York City have held their sales tax to the 3 percent level: Saratoga, Warren, Washington, and Westchester. A 4 percent rate is now most common for New York’s counties: three counties tax below this level, but above 3 percent (Dutchess, Ontario, and Orange); six are above the 4 percent level (Allegany, Erie, Herkimer, Nassau, Oneida and Suffolk). This year 53 upstate counties with rates exceeding 3 percent required state action to continue to collect the added sales tax.

In 2017, each of these county’s authorization for renewed sales taxing authority was addressed in a distinct bill, separately introduced and sponsored. Often these bills differed from each other, reflecting aforementioned locally negotiated political agreements or conditions set by state legislators for sponsoring the needed legislation. Ulster’s proposed special law specified that revenue from the additional 1 percent had to be shared with the city of Kingston in the same proportion as that negotiated for the underlying 3 percent levy; Clinton County’s bill, and several others, reserved the full additional penny-on-a-dollar for county purposes. Livingston’s bill specified that its additional sales tax revenue was to be used by the county to cover Medicaid costs. Onondaga’s directed about one quarter of the added tax money to the city of Syracuse.

Both George Amadore and Kevin Cahill enjoy the advantage of being in the majorities in their respective houses. Amadore’s S5568 passed the Senate on June 8th. Cahill’s A7409, however, was stalled in the Assembly.

But this time the issue in the Assembly was not local. The New York City majority in that house decided to block special sales tax renewal for all counties outside New York City as an offsetting bargaining chip to Senate refusal to reauthorize mayoral control of New York City schools. No deal was reached. The legislature left Albany without enacting Ulster’s additional sales tax, or that of any other upstate county.

Only a few days later, the deadlock was resolved in an omnibus bill (A40001) passed in a day-and-a-half-long special legislative session called by Governor Andrew Cuomo. That bill addressed a number of matters in addition to mayoral control and county sales tax authority renewal; one vote in each house passed the entire package, perhaps to assure that no one could walk away from the deal after getting their piece first, with others left holding the bag.[6]

Subpart XX of Section 1 of the omnibus bill was exactly the same as S5568/A7409, except that it extended taxing authority for three years, not two. The same was done in the bill for all other counties for which sales tax authority was extended. None complained about being given a “bonus year,” though this was of course not in accord with the provisions of the special legislation each county had specifically requested under the state constitution’s home rule requirement. So much for constitutional niceties.

There remains an intriguing question about whether simultaneously including sales tax reauthorization for all 53 counties in an omnibus bill is in accord with another state constitutional provision: Section 15 of Article III. Added in 1846 to prevent logrolling and assure that legislators have some chance to know the substance of local matters before them, it provides that: “No private or local bill, which may be passed by the legislature, shall embrace more than one subject, and that shall be expressed in the title.”

With regard to precedent, it is hard to imagine a subject more routinely, regularly, and fully treated as local by the New York State legislature as is renewal of additional sales tax authority for counties. And, of course, the omnibus bill was specifically and purposefully designed to embrace more than a single subject.

Logrolling on local matters is alive and well as a result of very strong informal norms of deference in the state legislature to local members on local matters. More generally, history tells us that, “It is unusual for any law to be voided on the basis of [Article III §15]” because of judicial presumption of constitutionality on “matters of this type” and deference to the legislature on the definition of the terms “local" and “single subject.”[7] With specific regard to sales tax extenders, in addition, the constitutional provision is unlikely to be invoked this year by any interested party. Having gotten more than they sought, counties have no incentive to make a principled defense of home rule in a lawsuit.

The state Senate this year passed a bill to remove the necessity for periodic renewal of county sales tax authority.[8] This one-house measure is, at best, symbolic. (No companion was introduced in the Assembly.) But even if such a measure were passed and signed by the governor it would not detract from the unavoidable lesson offered by the 2017 sales tax extender story. Though Article IX declares “Effective local self-government … are purposes of the people of the state,” neither the sword nor the shield given local governments in the constitution really assures local home rule in New York. Counties may have won the sales tax battle, but they continue to lose the home rule war.


[1] New York State Bar Association Committee on the New York State Constitution, Report and Recommendations Concerning Constitutional Home Rule (Albany: New York State Bar Association, April 2, 2016)

[2] Matter of Baldwin Union Free Sch. Dist. vs. Cnty. of Nassau, 9 N.E.3D 351 (N.Y. 2014).

[3] Local Government Sales Taxes in New York State: 2015 Update (Albany: Office of the New York State Comptroller, March, 2015), . The comptroller also notes that there are statutory exceptions and temporary authorizations for some cities to impose higher rates or preempt a larger share of the county rate.

[4] See "Enactment and Effective Dates of Sales and Use Tax Rates," (Publication 718-A, NYS Department of Taxation and Finance, October 2016),

[5] This does not include the ¼ percent sales tax levied in counties in the Metropolitan Transportation Authority service region.

[6] Title of Omnibus Bill A40001 Summary: ”Enacts into law major components of legislation relating to issues deemed necessary for the state; extends certain provisions of law relating to the imposition of sales and compensating use taxes (Part A); extends certain provisions of law relating to the imposition of hotel and motel taxes (Part B); extends provisions relating to mortgage recording taxes (Part C); extends provisions of law relating to additional real estate transfer taxes (Part D); relates to certain abatements of tax payments (Part E); postpones the expiration of certain tax rates and taxes in the city of New York (Part F); extends provisions of law relating to the reorganization of the New York city school construction authority, board of education and community boards, chancellor, community councils and community superintendents (Part G); relates to provisions affecting accidental disability benefits for police/fire members, New York city uniformed correction/sanitation revised plan members and investigator revised plan members (Part H); relates to operational expenses of certain gaming facilities located within Oneida county within 15 miles of a Native American class III gaming facility (Part I); relates to creating the Lake Ontario-St. Lawrence Seaway flood relief and recovery grant program; makes certain grants in aid adjustments and tax relief (Part J); relates to the use of state and municipal facilities program funds from the capital projects budget for the Lake Ontario-St. Lawrence Seaway flood relief recovery grant program (Part K); relates to the forest preserve health and safety land account and public utility improvements (Part L); and authorizes the renaming or designation of certain state parks, sites, highways and bridges in honor of Assemblyman Herman D. Farrell, Jr., Senator William J. Larkin, Jr., and Governor Mario M. Cuomo (Part M).”

[7] Peter J. Galie, The New York State Constitution: A Reference Guide (New York: Greenwood Press, 1991): 89.

[8] S6566 (2017); see also Senator George Amadore’s S2092 (2017).


The Nelson A. Rockefeller Institute of Government, the public policy research arm of the State University of New York, conducts fiscal and programmatic research on American state and local governments. It works closely with federal, state, and local government agencies nationally and in New York, and draws on the State University’s rich intellectual resources and on networks of public policy academic experts throughout the country.