Determine whether Town of Canajoharie (Town) officials properly budget for and allocate sales tax revenue.
Town officials did not properly budget for and allocate sales tax revenue. As a result, Town taxpayers residing outside the Villages did not receive all the benefit they should have from County sales tax distributions.
- The Town Board (Board) underestimated sales tax revenue in the town-outside-village (TOV) general, TOV highway and town-wide (TW) highway funds by an average of $83,477 (21 percent) for fiscal years 2018 through 2020.
- During fiscal years 2018 through 2021, the Board improperly allocated sales tax revenue totaling $253,603 to the TW highway fund before reducing the TOV funds’ tax levies to zero. The same amount of taxes were unnecessarily levied in TOV funds, creating taxpayer inequities.
- Use realistic sales tax revenue estimates when developing budgets.
- Allocate sales tax revenue to eliminate unnecessary levies on the TOV area.
- Consult with legal counsel to determine remedies available to address taxpayer inequities.
Town officials generally agreed with our recommendations and indicated they planned to initiate corrective action.