SULLIVAN COUNTY, NY — Sullivan County saw an increase in sales tax during this most recent quarter, but county officials are still acting conservatively to avoid financial strain.

The county has recently faced financial difficulties, with the county receiving less in sales tax then projected. According to County Manager Josh Potosek, the county at one point was down 16 to 17% year over year. The majority of the deficit was in construction materials, which saw a large deficit between where it was projected and where it was.

However, that deficit has been closed. Potosek said in an interview with the River Reporter that the county is now only down 2%, which he said wasn’t “great, but it's certainly better than being down double digits.” 

The deficit with construction materials has also been closed. Sullivan County Treasurer Kathleen Lara said during the August 13 meeting of the Sullivan County Legislature’s Management and Budget Committee that the county saw a rise of $13 million in gross sales for construction materials. 

This increase in sales tax makes the budgeting process a little easier for the county and for its citizens. With the rebound in sales tax figures, the county would only need to raise property tax around 6% to cover its year-over-year shortfall, rather than 30%. However, when the county's other financial pressures are taken into consideration, the county is still looking at a projected 20% property tax increase, according to Potosek.

In an interview with the River Reporter, Lara explained the reason for the increase in sales tax revenue was partly seasonal, saying that “there was not a lot of building this winter” when the numbers were first collected.

Lara also attributed the rebound to an education effort her office performed to tell developers and vendors about sales tax to make sure that Sullivan County was getting what it earned. Lara said that. because she deals with taxes daily, she took for granted that people didn’t actually know. As her effort went underway, it spread quickly between developers and vendors, she said.

“Once you start telling one developer and then two developers, it gets around,” Lara said. “Developers don't want to be the ones being blamed for Sullivan County’s decline, so they were willing to look at what they were doing.”

Potosek also said that he thought Lara’s education effort was successful, and attributed the rebound partially as a result of said efforts.

“I think Kathleen did a great job taking that on,” Potosek said. “Probably some of that reason why we're seeing the rebound is because… they're recording where the sales should be going appropriately versus just dumping it all into one bucket no matter where it was getting delivered.”

The county’s fiscal future

While this rebound has provided some good news to the county’s finances, the long term picture still remains unsure. Lara said that the county should remain conservative, and that the legislature and the county are looking at ways to cut spending while still providing services.

“We have to be conservative because we started on the negative because the tax increase that was approved [in 2025] was insufficient,” Lara said. “I will say the legislature [is] talking about how they're looking at everything and trying hard to cut spending.”

Potosek said while the county is in a period of financial uncertainty, once the county gets over this hill, ongoing economic development projects will come to fruition and the county will reap the benefits

“I think we have to get through this little bit of a malaise, and then hopefully as those bigger projects start coming online, you're going to have more people here, more people spending money, which helps our budget because the sales tax is going up  room tax goes up,” Potosek said. “In a two-year, three-year period, I think when all those things start coming online, it's going to provide some relief, certainly for county government."

Potosek also acknowledged that citizens of Sullivan County are struggling due to inflation and a rising cost of living, which in turn affects how much money they’re spending on items that generate sales tax.

“You have a subset of the population that's struggling, and they're not spending a lot of money on things that generate sales tax,” Potosek said. “You're starting to see people getting into families getting into a pinch, individuals getting into a pinch. If my electric bill is going up, or my fuel bill to put gas in my car is going up, it doesn't really allow for a lot of other discretionary spending.”

Both Lara and Potosek hope that the trends continue and the county comes out flat, with Potosek saying that “hopefully [the sales tax] keeps trending in the same direction.”

“I really feel that if we can just stay right around our budgeted sales tax, I'll take it,” Lara said. “In a perfect world, you'd love for more money and more sales tax.” “But at this point I would like to think that we will come in flat.”

Editor's note: The article as originally posted included an incomplete projection of the county's property tax increase. This has been corrected as of Wednesday, September 2 at 1 p.m.