Sullivan County Sees Signs of Improvement in Sales Tax Revenue, But Budget Challenges Remain

SULLIVAN COUNTY — Sullivan County’s sales tax outlook has improved modestly after months of steep declines, but county officials say the gains are not enough to ease concerns as planning begins for the 2027 budget.

Speaking after this week’s meeting of the Sullivan County Legislature, Director of Communications Dan Hust said summer spending has narrowed the county’s revenue shortfall, though officials remain cautious about what the numbers will mean for taxpayers next year.

“There was some light at the end of the tunnel,” Hust said. “Although, of course, if you talk to our budget people, they’re like, ‘Don’t count on anything yet. We’re only halfway through the year.'”

The county drew attention earlier this year after posting the state’s steepest decline in sales tax collections. Sales tax has become one of Sullivan County’s largest sources of revenue, making the downturn a central issue as officials prepare next year’s spending plan.

According to Hust, officials from the county treasurer’s office told legislators this week that the county is now about $1.7 million behind last year’s collections, an improvement from earlier projections as tourism and seasonal spending have boosted receipts.

If the current trend continues, however, the county would still finish the year more than $6.5 million below last year’s sales tax revenue.

Hust said that level of shortfall could require borrowing or significant budget adjustments.

“It would require a loan just to make up that gap, a 9% tax increase, just under 9%, to offset that,” he said.

Departments told to reduce spending

Despite the improving revenue picture, county officials are continuing cost-saving measures while developing the 2027 budget.

Hust said departments have been directed to identify ways to reduce expenses by 10 percent and avoid new spending unless absolutely necessary. The county has also slowed hiring by leaving some vacant positions unfilled.

“It continues to be a balancing act,” Hust said.

The budget development process is already underway, with department proposals being reviewed by County Manager Joshua Potosek’s office and the Division of Management and Budget before a tentative budget is presented to the legislature this fall.

While Potosek will recommend a spending plan, Hust emphasized that legislators have the final say.

“They’re the ultimate decision makers on this,” he said, noting lawmakers can adjust spending, draw more heavily from reserve funds or make other changes before adopting a final budget in December.

No service reductions yet

Hust said the county has not cut public services in response to the revenue decline.

“No. Not that I’m aware of,” he said. “I don’t believe anyone is actually slashing services or depriving people of the programs they need to have at this moment.”

Instead, officials say they are trying to find savings now to minimize the impact on taxpayers next year.

“There are so many people very, very cognizant, extremely sensitive to the plight of taxpayers in Sullivan County,” Hust said. “Nobody wants to do any kind of significant tax increase.”

Hope tempered by caution

Although officials welcomed the improved revenue trend, Hust said no one at the county is ready to declare the problem solved.

“Maybe the corners of our lips here have turned up a little bit,” he said. “It’s not a full-blown smile because there are still difficult decisions to be made.”

Hust said county leaders remain focused on keeping any property tax increase as close as possible to New York’s 2% tax cap.

“There is every effort to try to get us to that 2% property tax cap,” he said. “At least with these numbers we’re seeing with sales tax, that actually may be more of a reality than we had thought before.”

Image Credit: Sullivan County Government