SULLIVAN COUNTY, NY — Sullivan County is aiming to ease the current burdens on county finances in its 2027 budget by increasing property taxes 27.67 percent, by looking conservatively at expenses and estimating a more conservative sales tax projection while not having any service cuts.

The budget, which in total is $299.9 million, is focused on “budgeting wisely,” according to the executive summary. Sullivan County recently has seen decreasing sales tax revenues, which, along with rising costs, has resulted in a difficult budgetary situation, the county has said. 

“The development of the 2027 tentative budget demands a strategic and thoughtful approach to appropriately fund operations, and this document represents my and County staff’s best efforts to balance the need to provide services with the need to limit the burden placed on property taxpayers,” Potosek wrote. 

Potosek’s office did not comment on the budget when asked by the River Reporter. 

Property tax increases

The property tax increase was originally going to be much higher. Reporting from the River Reporter in June said that the property tax increase could be around 30 percent. Potosek wrote in the executive summary that while the projections were originally a 35-percent increase, the office worked to lessen that.

“Originally, budget estimates indicated a tax increase of 35 percent might be necessary,” Potosek wrote. “We have knocked that down significantly. However, as a taxpayer myself, I recognize this is still a sizable increase, driven by falling sales tax revenues and rapidly increasing costs.”

Chris Knapp, director of real property tax services, said that the property tax would affect people differently depending on the value of their house and other local tax increases.

“Your special districts could be higher. Your town lines could be higher. That’s all dependent upon how those towns and those districts are operating,” Knapp said. “Property tax is based upon the value of the property, so it’s all subjective, really. If you have a higher value home than somebody else, the bill is gonna be a lot higher for that person.”

Sullivan County Treasurer Kathleen Lara said that because of the fluctuation with town and special district tax lines, there is no knowing what the final tax impact will be until the towns finalize their budgets.

“A lot of towns are doing the two- percent tax cap [override]. They’re agreeing to go over it, but there’s no way to know what those town lines are going to be until they pass their budgets,” she said.

Lara also said that the tax increase should have come last year, when the budget called for a 9.1-percent tax increase, and that because the county did not raise taxes last year, the financial stress is going to be worse this year. She said the county needs to act now, or else the situation will only worsen.

“When revenues don’t keep up with expenditures, they don’t go away,” Lara said. “Now it’s just becoming an even bigger burden on the taxpayer.”

She added that if the county doesn’t increase taxes, it would have to find cuts elsewhere.

“If you don’t raise the taxes, what do you do next?” Lara said. “You cut services.”

Sales tax

Another step the county is taking to set up its future finances for success is by estimating a lower amount of sales tax the county will receive. The budget estimates that the county will receive $71 million in sales tax, a decrease of $6.5 million from the estimations in the 2026 budget. The budget states that due to economic trends, it’s better to have the estimation be lower.

After peaking in 2024, Sullivan County's sales tax revenue has seen a steep decline in succeeding years.

“It was anticipated that the county would see a plateau in sales tax growth this year and beyond due to the economic prospects on the horizon. It is fiscally prudent to budget this revenue item relatively conservatively, as it is sensitive to what is happening in the national and regional economy,” the budget reads.

According to Lara, Potosek is being cautious about sales tax. Lara said that her office estimated the sales tax to be at $72 million, but Potosek preferred a more conservative estimate. Lara said that the number they reached is preparing for the worst, but hoping for the best.

“If we go above it, great,” Lara said. “But we need to prepare ourselves for the possibility that we don’t get that.”

“We need to be realistic,” she added.