UTICA -- The City of Utica faces a multi-million dollar budget shortfall and officials are going over several ways to bridge that gap. One of them includes an increase in the city sales tax, but store owners worry it could lead to a drop in sales.
You might not look closely at those little numbers on your receipts, but store owners in Utica say, if taxes go up any more, shoppers will take notice. "I don't think the people can afford any more taxes," said Juan Ortiz, owner of Family Grocery. "The reason a lot of people leave the city and don't want to live here anymore is because we have too many taxes."
Following a year that included a triple hit of a $500,000 drop in sales tax revenue, a $150,000 in mortgage tax revenue and a $150,000 plunge in utility sharing, the Utica Common Council proposed to bump the city sales tax from 8.75% to 9%. Mayor David Roefaro says the council will need to consider the pros and cons before going forward. "It's easy to say, 'cut government,' but if we cut any more, we are going to cut services, and I don't think people want to cut services," said Roefaro.
For shoppers, the effects of the increase would be barely noticeable. For example a pack of cigarettes costs $6.30 with a 55 cent sales tax. With the increase, that would move up to almost 57 cents. The Utica Catholic Book Store gets 40% of its profit from taxed items, and owner Richard Trosset worries an increase would actually reduce sales in the city. "It'll make people think twice," said Trosset. "People are hurting as it is, and they are just going to cut back even more."
The sales tax brought 12 million dollars to the city in 2008. If the increase is passed by legislators, it's estimated it would bring an additional 1.5 million dollars to help bridge the city's 4.5 million dollar budget deficit. Before any of that can happen, the city must first hear what taxpayers have to say.
