A fresh look at first-quarter sales tax data shows a regional economy that’s still growing overall — but increasingly uneven, with sharp differences emerging between counties that are gaining momentum and those losing ground.
Local sales tax collections statewide rose 5.1% in the first quarter of 2026, a stronger showing than the past two years and above pre-pandemic averages. But that topline number masks a more complicated picture across the Finger Lakes, Central New York and Southern Tier — where performance ranges from strong expansion to outright contraction.
Finger Lakes: Dragged down by Monroe, but strength underneath
The Finger Lakes was the only region in New York to post a year-over-year decline, slipping 1.2% in the first quarter. That stands in sharp contrast to most of the state, where nearly every region saw growth.
But the headline decline is misleading.
The drop is overwhelmingly tied to Monroe County, which fell 5.1% year-over-year and carries outsized weight in the region’s totals. Without Monroe, much of the Finger Lakes is actually performing well.
Several smaller and mid-sized counties posted strong gains:
- Seneca County surged 9.6%, one of the strongest performances statewide.
- Wayne County climbed 6.0%, showing steady consumer activity.
- Yates County increased 5.9%, continuing a multi-year upward trend.
- Ontario County rose 3.0%, reflecting stable but moderate growth.
What this suggests is a regional split: smaller, more tourism- and local-consumption-driven counties are growing, while the region’s largest economic center is distorting the overall picture.
That dynamic matters. It points to a Finger Lakes economy that is not collapsing — but fragmenting.
Central New York: Strongest regional growth, but not universal
Central New York posted one of the strongest regional performances in the state, with sales tax collections up 5.8% year-over-year.
That growth is being driven heavily by Onondaga County, which rose 7.5% and continues to anchor the region’s economic activity.
But again, the underlying data shows unevenness:
- Cayuga County declined slightly, down 0.5%, indicating flat or slightly weakening local spending.
- Cortland County also dipped, down 1.0%.
- Madison County saw modest growth at 2.7%.
The takeaway: Central New York is growing — but that growth is concentrated, not broadly distributed. The region is benefiting from stronger urban and institutional economic drivers, while smaller counties are treading water.
Southern Tier: Growth, but losing momentum
The Southern Tier posted a 2.1% increase — positive, but well below the state average.
More importantly, it reflects a slowdown.
Several counties are underperforming or declining:
- Broome County dropped 2.1%, signaling weakening activity in one of the region’s core markets.
- Schuyler County was essentially flat, up just 0.5%.
Others are doing better:
- Tompkins County rose 4.0%, continuing to benefit from institutional stability and population dynamics.
- Chemung County posted a solid 6.6% gain.
Still, the broader pattern is clear: the Southern Tier is growing, but slowly — and with signs of softening in key areas.
What’s driving the divergence?
The broader economic backdrop helps explain the variation.
Inflation averaged 2.7% in the first quarter, while wage growth remained strong at over 5%, helping sustain consumer spending. But underlying consumption growth has slowed, and job growth has been minimal — a combination that tends to produce uneven regional outcomes.
There are also structural factors at play:
- Tourism shifts, including fewer Canadian visitors in border regions, may be weighing on some areas.
- Policy changes, like taxes on short-term rentals, are altering where and how revenue is generated.
- Volatility from gas prices and tariffs is creating short-term distortions in spending patterns.
And at the county level, technical adjustments — accounting corrections in tax distributions — can significantly skew quarterly results, especially in smaller markets.
The bottom line: Growth is real, but uneven
At a glance, New York’s local economies appear healthy.
But a closer look at the Finger Lakes, Central New York and Southern Tier shows something more nuanced — and more concerning.
Growth is increasingly concentrated in specific counties and sectors, while others stagnate or decline. Larger urban centers can lift regional totals, masking weaker performance elsewhere. And smaller counties are becoming more sensitive to localized factors like tourism swings or a handful of large transactions.
For the Finger Lakes in particular, the story is not decline — it’s imbalance.
And if that imbalance continues, it raises a bigger question: not whether the region is growing, but who is actually benefiting from it.
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