Higher gas prices = more sales tax for Erie County

Aug 2, 2018

It's the law of unintended consequences: the rising price of gasoline means sales tax collections are up across New York State - and quite noticeably in Erie County.

Across New York, state Comptroller Tom DiNapoli says the gasoline portion of sales tax collections from gas taxes is up nearly 14 percent. That is part of an overall increase of 6 percent in the first six months of year in state sales tax collections - the fourth straight period of growing sales tax collections.

Credit Mark Scott / WBFO News

In Erie County, sales tax collections in April-June were up and there is a positive budget variance approaching $10 million, against a negative variance of $7 million a year ago. County Executive Poloncarz described the financial picture as good.

"We've got some really good numbers in how we have been able to maintain Medicaid costs," Poloncarz said. "We've kept down costs associated with overtime and some other fringe benefit lines, but we've received a big benefit as a result of the increase in gasoline prices. Prices are roughly $0.60 more per gallon  than they were last year. As a result of that, we've gotten a nice little bump up in our sales tax."

Poloncarz said he is not assuming that increase will continue, as he prepares his budget for next year, due in October. He said things can go bad, mentioning the 2004 Red-Green budget mess of years past when county finances fell apart, spiralling into a control board.

"We're still careful," he said. "We will have conservative growth in next year's budget, so we will not anticipate growth greater than 2 percent over what we expect to do this year. But if things continue as they are, we will have had a kind of banner year on sales tax. But we also know it's a one year hit. So we're not going to expect to see 5 or 6 percent growth next year."