Part II: Sales Tax Allocation
Impact on the City of Elmira: Revenues vs. Shared Services
Fact: Recently completed management review by independent auditing firm confirmed that county assumption of certain city expenses between 2015 and 2018 offset loss of revenue for City of Elmira when compared to sales tax allocation change/loss.
Fact: The City of Elmira’s current negative fund balance and bond rating downgrades are attributable to substantial operating deficits in 2015 and 2016 that were not identified until 2017.
Observations from Part II review of Impact
* Review of above City impact summary sheet highlights comparison of county assumption of city expenses and sales tax allocation change/loss revenue. Calendar year 2015 and 2016 impact line offset each other but City of Elmira still ran an audited $4.26 million operating deficit.
* The full sales tax reallocation period from 2015-2018 shows the full impact of county cost assumption vs. sales tax allocation change/loss revenue from a loss of $103,164 to a gain of $104,508 for the City of Elmira depending on final sales tax collections for 2018. A 4% growth rate would result in a break-even result for the City of Elmira (current sales tax collections are tracking at 7%.) City of Elmira operating deficits for the period 2015-2018 are projected to exceed $5 million dollars.