Legislature Approves Sales Tax Sharing Agreement with City of Kingston

Published on February 17, 2026

KINGSTON, NY - The Ulster County Legislature has approved a five-year sales tax sharing agreement negotiated by County Executive Jen Metzger and Mayor Steve Noble, and approved by the Kingston Common Council on February 3. The previous five-year agreement expires on February 28. The new agreement, proposed by the County Executive with input from members of the Legislature, holds the City of Kingston’s share at 11.5% and increases the distribution to towns from 3% to 3.5% — the first increase since 2001.

The County government collects 4% on taxable purchases made in Ulster County. Under the new agreement, effective March 1, 2026, the County government share of this 4% would decrease from 85.5% to 85%, with 3.5% distributed among the County’s 20 towns based on assessed property values. If, however, the Governor and State Legislature decide in the future to lift the cap on the County’s weekly share of Medicaid costs, the County share would revert to 85.5% (and the towns' share to 3%) in the following fiscal year. The provision was included because counties are facing significant fiscal uncertainty in the wake of federal Medicaid cuts rolling out over the next two years.

The new sales tax sharing agreement includes a provision to potentially increase towns’ share by up to 12% of excess sales tax proceeds if those proceeds exceed the amount budgeted for the fiscal year — a provision that was added based on input from Legislators Laura Donovan (D-11, Marlborough), Lindsey Grossman (D-19, Rosendale/Marbletown), and Ann Peters (D-2, Saugerties).  

“We’ve provided towns with a straight increase to 3.5% so municipalities have more revenue they can count on in their budgeting process, representing the first such increase since 2001,” said County Executive Jen Metzger. “The new agreement also allows the County to share additional revenue if we have a banner year in sales tax. At the same time, we were careful to ensure a prudent balance that benefits the towns while also addressing the fiscal uncertainty for the County created by massive federal cuts to Medicaid. I want to thank Mayor Noble for his partnership and support in reaching this agreement. I also want to thank three of our new Legislators, Laura Donovan, Lindsey Grossman, and Ann Peters, for their valuable input.”

"Increasing the town's share to 3.5% will provide guaranteed additional non-property tax income for each town,” said Legislator Jeff Collins, Ways and Means Committee Chair. “In years where there is a windfall in sales tax receipts, the towns will share a significant portion of that windfall."

"We are in unprecedented times with federal cuts forcing states and counties to do even more to protect residents’ critical needs, including healthcare,” said Legislator Lindsey Grossman. “This new sales tax sharing agreement strikes the right balance — looking ahead to ensure Ulster County can provide for residents in the future, while also ensuring town boards and supervisors across the County share in the upside when sales tax revenues exceed projections."

“Strengthening the guaranteed share for our towns and villages helps municipalities plan ahead as costs continue to rise, while still allowing them to benefit when sales tax revenues come in stronger than expected,” said Legislator Laura Donovan.

"This sales tax sharing plan provides an increase in stable, reliable funding with the opportunity for towns to benefit from higher-than-expected sales tax revenues,” said Legislator Ann Peters. “Ulster County has also joined many other counties across New York State and included a Medicaid Cap trigger within this Agreement. This new provision safeguards essential services in the event that NYS shifts Medicaid funding responsibilities to counties."

The new agreement will remain in place through February 28, 2031, subject to final approval by the New York State Comptroller.