Orange County cuts property taxes by almost $10M as sales-tax income soars

GOSHEN - Orange County property owners will see their county taxes drop in January after booming sales-tax income enabled officials to chop nearly $10 million in property taxes needed to support the county budget.

The 2023 spending plan finalized this month anticipates Orange will rake in a whopping $75 million more in sales-tax revenue than what it budgeted last year. Taxes from purchases have raced ahead of last year's forecast and are on track this year to exceed the 2021 total by about 11%, according to a projection this week.

That sales-tax surge − plus a pile of federal pandemic aid − has allowed the county government to take the unusual step of slashing its property-tax levy by $9.6 million, to $124.5 million. Though the impact on tax rates varies from town to town, officials estimate the average homeowner will save $83 on the county portion of the tax bills they get next month, which also include town or city taxes.

They boast the overall tax rate is the lowest it has been since 1976.

Orange County Executive Steve Neuhaus
Orange County Executive Steve Neuhaus

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"We will continue to do more with less, which is a result of our dedicated and skilled county workforce and our management team,” County Executive Steve Neuhaus said in a statement this month after county lawmakers unanimously approved the $898 million budget.

That plan included an even steeper tax reduction than the $7.6 million decrease Neuhaus proposed in September. The Legislature cut an additional $2 million from the levy after reviewing his budget proposal in committee meetings in October.

Sales tax plunged for several months in 2020 when the pandemic forced businesses to close, but has roared back since then and continues to grow. It's a much bigger cash stream for the county budget than property taxes: Of the $394 million Orange expects to collect next year, $290 million will go toward county expenses and $104 million will be distributed to Orange's cities, towns and villages.

The county plans to add 20 positions to its workforce next year, bringing it to a total of 2,478 budgeted positions. Despite the net increase, the county is eliminating 28 jobs at the Valley View Center for Nursing Care and Rehabilitation, its 360-bed nursing home. The county had closed a quarter of those beds due to staffing shortages.

The county also anticipates a $2.4 million increase in taxes on overnight hotel stays in 2023, a result of growing tourism and hotel proliferation in Orange. It plans to spend $1 million of that added income on tourism marketing. The county now has 3,841 hotel rooms and another 351 under construction.

The county, though, expects to collect less revenue from the federal government for housing immigration detainees in the county jail while they await immigration court cases. After sharply reducing this year the number of detainees it would board, the county budgeted a $4.8 million decrease in outside revenue in 2023.

Chris McKenna covers government and politics for the Times Herald-Record and USA Today Network. Reach him at cmckenna@th-record.com.

This article originally appeared on Times Herald-Record: Orange County budget cuts $10M in property taxes after sales tax surge