By Mayor Meg Kelly and Commissioner of Finance Michele Madigan
We are encouraged that 2019 will build off the economic successes of 2018, due not only the traditional economic indicators that reflect the dynamic economy of our city, but also the specific steps taken by Saratoga Springs City Council to drive future prosperity.
As of mid-December, the city had generated 10.1 percent more sales tax than during the same period last year. Moreover, 2018 is trending to be the best year of sales tax in city history, potentially exceeding $13 million.
Occupancy tax that was generated through the first three quarters of 2018 has also been at a record pace, a fact made more impressive given that it does not include units rented through sites like AirBNB.
The city is exploring ways to bring these rental units in line with traditional lodging establishments to ensure both a level playing field and the safety of renters, though accomplishing this requires the cooperation of the county and/or state, which is taking longer than expected.
One economic indicator that has lagged is mortgage tax, which is expected to fall roughly 20 percent below what was budgeted for 2018. This is largely driven by factors outside the city’s control such as rising interest rates and low inventory.
Mortgage tax aside, the strong performance of sales tax and occupancy tax not only benefit the city’s budget, but also gives hard data to support our belief that Saratoga Springs remains one of the best places in New York State to live, work, and visit.
Looking to the future, the City Council took steps in 2018 to build upon what makes Saratoga Springs so unique, including our thriving arts community, as well as address concerns raised by those in the community, such as workforce/affordable housing.
Regarding the arts, the city partnered with the Saratoga Performing Arts Center (SPAC) through an economic development award to promote Saratoga Springs as a worldwide destination for arts and culture. The council also submitted a grant proposal for the redevelopment of the vacant Universal Preservation Hall into a performing arts center that resulted in an award of $750,000 to Proctors through the Governor Cuomo’s Restore NY program.
The city not only assisted on the submission of this proposal, but also contributed funds to help offset the 10 percent match required by the state for this project.
Universal Preservation Hall is expected to be an anchor cultural attraction and economic engine of the future.
As the reputation of Saratoga Springs continues grow, so too does the demand to live in the city. To this end, workforce/affordable housing has been a focus of the City Council in recent years. In 2018, the city took steps to assist in the creation of additional housing units for residents across the income spectrum through “payment in lieu of taxes” (PILOT) agreements, as well as an economic development award to assist with a grant proposal for The Link at SoBro, a mixed-use complex that will include affordable housing and business incubator space on South Broadway.
Workforce/affordable housing projects are valuable to the city not only for the housing opportunity these allow working individuals and families, but also because these projects can revitalize parts of the city and provide a workforce and customer base that contributes to our flourishing city economy.
Exploring the economic outlook for a municipality is different from industry. Public sector government and its constituency affect and can be affected by a broad and diverse range of opportunities, challenges, and considerations that may not be common to general commerce. The City of Saratoga Springs, with its vibrant downtown, residential, rural and park spaces; diverse businesses, educational facilities, arts, and entertainment; thoughtful land use planning; active public participation; and inspired government administration, has much to work with as it enters the 2019 economy.