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Shop Local Efforts Make Economic Sense Ellicottville Growing Stronger from Bed and Sales Tax Revenues

By Jann Wiswall

There is extensive evidence around the country that proves that shopping locally improves the economic strength of individual communities. Shopping locally creates jobs, saves people time and money, helps minimize our impact on the environment, encourages community involvement and produces a more sustainable economy.

Shopping locally also means more tax revenues are available to local governments to cover expenses and focus on economic development.

For example, Cattaraugus County’s 5 percent bed tax paid by guests on overnight lodging at hotels, motels, bed and breakfasts, etc., directly supports economic development and tourism promotion efforts throughout the county. County lodging facilities generated some $700,000 in 2012.

The income from the bed tax, which the Cattaraugus County legislature extended for three more years on November 21 (it was first instituted in 2006), is distributed according to a formula based on the percentage of tax generated. According to Crystal Abers, director of the Cattaraugus County Department of Economic Development, Planning and Tourism, the chambers of commerce in Olean, Salamanca and Ellicottville receive a larger proportion of the funds (since they have the majority of the lodging facilities) in the form of reimbursements for county-approved expenses related to promotion of community activities. The balance is used by the county to promote activities and events in non-chamber communities.

In 2012, the Ellicottville Chamber of Commerce received approximately $65,000 in reimbursements from the county to offset costs associated with promoting Fall Fest and other Ellicottville events that attract tourists and fill hotel rooms.

“There are incentives attached to the reimbursements,” explained Abers. “If promotional activities result in more hotel rooms being filled, more money will be available for promotional activities the next year.” She expects the Ellicottville chamber’s reimbursement level to increase to $75,000 in 2013.

County Sales Taxes Promote Business Development

Another critical revenue source for local governments is the 8 percent sales tax. This tax is divided equally by the state (4 percent) and county (4 percent). One percent of the county tax is used exclusively for building and maintaining county roads and bridges, and the remaining 3 percent is shared by cities, towns and villages to promote economic development.

According to Abers, by the end of 2012, the Town of Ellicottville will have received nearly $1.3 million in county sales taxes, and the Village of Ellicottville will have received more than $350,000.

It can’t be overstated how important sales tax revenue is to Ellicottville. The 2012 town operating budget, for example, is roughly $3.4 million, so sales tax revenues cover well over 30 percent of those expenses, according to Lindsey Coburn, the town supervisor’s clerk. The rest is raised through property taxes and revenues from fees, interest, rentals, sales of town equipment, etc. When more sales tax is generated, there is less need for increases in property taxes.

With the new businesses that have recently opened (e.g. Tim and Bonnie’s Pizza, EVL Bowling), other businesses growing (e.g. Holiday Valley, HoliMont, Kwik Fill) and more coming to town in 2013 (e.g. Tim Horton’s), prospects are looking good that sales tax revenues will indeed increase next year and well into the future. So every time you shop, dine and stay in Ellicottville, remember that you’re supporting not just those terrific businesses, but also the essential services provided by the town and village that make Ellicottville the special place that it is.

County Support for Shop Local Efforts

The county’s Department of Economic Development is developing a web site called “Made in Cattaraugus County” to support and promote local businesses whose products are produced in the county. The site will list manufacturers and artisans of commercial/building products, cabinetry, clothing, art, foods, beverages, agricultural products and more. Its goal is to “help get more business to each business,” said Abers, who added that this free service is part of a broader buy local campaign being planned by the county. Those businesses interested in being included on the site may visit www.ccbvoc.com or call (716) 938-2311.

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