ALBANY – The State Senate has passed a bill that would restore the County’s additional sales tax revenue to its municipalities.
Last month, it was revealed that the county had improperly distributed sales tax revenue to municipalities. The county has been sharing 3.75 percent of its sales tax revenue for more than a decade, though it is authorized to share only 3 percent. This oversight could cost municipalities at least $20 million in 2026, and $5 million has already been withheld from cities, towns, and villages in the first quarter.
Skoufis (D, Orange County) and Assemblyman Chris Eachus (D, New Windsor) are the prime sponsors of the bill in Albany, with the county’s other lawmakers – Democrat and Republican, including Assemblyman Jonathan Jacobson (D, Newburgh) and Rob Rolison (R, Poughkeepsie) also backing the measure.
The bill will now need to pass through the Assembly, which is expected to do so within the next few weeks. Governor Kathy Hochul would then have to sign the bill into law. Skoufis, the law is passed on or around July 1, before Orange County municipalities are withheld additional sales tax.
“This legislation has been a priority for me because it’s a priority for the people of Orange County,” Skoufis said. “Between the cost of gas and groceries, no one in our communities can afford the skyrocketing property taxes that the county’s faulty accounting would cause. I remain optimistic we can see this legislation signed into law by July.”
If the legislation is passed, the County’s towns, villages, and cities will be reimbursed the full amount they have lost retroactively to January 1, 2026. Meanwhile, municipalities are making contingency plans, such as potential hiring freezes, budget cuts, and other cost-cutting measures, which they hope will not have to be implemented.
The County only learned of its decade-long sales tax error in early April when County Attorney Rick Golden’s Deputy, Carol Pierce, was informed of the error by the State Comptroller’s Office.
“Great work by my colleague Senator Skoufis for successfully moving this legislation in the Senate, especially given the last-minute nature of how we were informed about this,” Eachus said. “Looking forward to getting this passed next week in the Assembly and fixing this issue for our Orange County taxpayers once and for all. One hurdle down, two more to go.”