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Yates County Administrator Nonie Flynn calls for end to local sales tax diversion

The New York State Budget for the 2022-23 state fiscal year is set to be approved by Friday, April 1. Leaders across the state’s 62 counties have advocated for what they’d like to see included in the state budget.

Yates County Administrator Nonie Flynn recently sat down with’s Ted Baker to discuss New York’s practice of diverting county sales tax to fund state programs and progress on Yates County’s broadband initiative.

Diversion of county sales tax to state programs

Fylnn advocates against the practice of diverting local sales taxes to fund state programs, particularly for the New York State Aid and Incentives for Municipalities (AIM) Program. The practice began three years ago under former Governor Andrew Cuomo.

According to the New York State Association of Counties (NYSAC), $677 million in local sales taxes have been diverted to the state’s general fund since 2019. Current Governor Kathy Hochul did not include withholding local sales tax to fund the AIM program in the proposed SFY 2022-23 executive budget.

Flynn said, “Yates County in 2019, when [the diversion] first began, amounted to about $167,000 a year that they cut from our sales tax revenue. New York State has been doing that ever since. However, our new governor is ending the diversion of our sales tax revenue to pay for the AIM program.”

In response to the COVID-19 pandemic, the state also began diverting local sales tax revenue to fund the Disaster Provider Assistance Account for hospitals.

“In 2021, Governor Cuomo did a diversion from our sales tax revenue to finance a temporary state controlled distressed hospital and health facilities fund in response to the COVID pandemic,” explained Flynn. “Hopefully, that will end in 2022. However, the end of that is not in Governor Hochul’s budget. She’s going to continue diverting some of our sales tax revenue to pay for the distressed hospital fund, and that’s about $86,000 per year for our county.”

Expanding quality internet access

Yates County funds their ongoing broadband initiative through the federal USDA ReConnect Loan and Grant Program, meaning the county isn’t eligible for tax exemptions through the state Connect ALL Initiative.

“We’re putting in 220 miles of fiber, reaching over 1,600 premises throughout Yates County,” said Flynn. “If we’re going anywhere near a New York State Road, we’re still going to have to pay those taxes on a right of way for those roads. We’re also lobbying to get those right of way fees removed from the New York State budget for Yates County.”

The county’s is currently in the first phase of ReConnect grant implementations. This month, said Flynn, the county applied for an $8 million USDA ReConnect 3 grant for 131 miles of fiber optic cable to provide expanded broadband access to unserved/underserved premises in Yates County.

“The federal government has funded [ReConnect] tremendously for this next round. Our general manager at the USDA that we work with almost every week has said that Yates County is in a really good position to receive this next round of grant funding,” explained Flynn. “We have a a good public-private partnership with Empire Access, where we still own all of the fiber, but we receive some of the revenue when we have customers sign up.”

You can listen to the rest of Ted Baker’s interview with Yates County Administrator Nonie Flynn here.