City faces sales tax slump

NORWICH – City sales tax revenue is down 5.8 percent compared to this time last year, based on data provided Monday.

Negative economic trends and unemployment rates nationwide are a direct cause, said city Finance Director William Roberts.

“This is virtually a nationwide effect,” said Roberts. “People have scaled back on their discretionary spending – people that are employed and laid off.”

About one-fifth of the city’s revenue stream relies on sales tax generated by stores, restaurants, bars and automobile sales, according to budget figures.

“There’s definitely a correlation with unemployment going up,” said Roberts.

Since January, the unemployment rate in Chenango County has averaged 9.2, according to state labor statistics. Over the same time period in 2008, the average was 6.3.

Normally such a dip in sales tax would put pressure on budget funds, Roberts explained, but the loss has been offset by an increase in money generated by ambulance calls.

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