ALBANY – The State Assembly and Senate introduced bills on Tuesday to pass a law that would restore the County’s additional sales tax revenue to its municipalities. 

Last week, it was revealed that the county had improperly overdistributed sales tax revenue to its 42 cities, towns and villages. The county has been sharing 3.75 percent of its sales tax revenue for more than a decade, though it is authorized to share only 3 percent. This oversight could cost municipalities at least $20 million in 2026.

Assemblyman Chris Eachus (D, New Windsor) sponsored bill A11249 with co-sponsors Karl Brabenec (R,C-Deerpark), Jonathan Jacobson (D, Newburgh) Paula Kay (D, Rock Hill) and Brian Maher (R,C-Walden).

Senator James Skoufis (D, Cornwall, sponsored the Senate bill, S10188, with Rob Rolison (R, Poughkeepsie) co-sponsoring. The Orange County Legislature during its meeting on Thursday will submit a home rule request to the State Legislature seeking approval of special legislation to retroactively authorize the additional 0.75 percent. The legislation would need to pass both the Assembly and the Senate before being signed by Governor Kathy Hochul.

“Even though this request came in late from the county administration, our bipartisan state delegation is working hard to get this done before the end of session next month,” Skoufis said. “Absent this fix of the county’s error, services will be cut and property taxes will skyrocket, both of which are unacceptable.”

Asked if the Governor would sign the legislation if it reached her desk, a spokesperson for Hochul’s office said: “Governor Hochul will review any legislation that passes both houses of the legislature” without adding further comment.

The County only learned of its decade-long sales tax error in early April when County Attorney Rick Golden’s Deputy, Carol Pierce, was informed of the error by the State Comptroller’s Office. If the legislation is passed, the county’s towns, villages, and cities will be reimbursed the full amount they have lost in the first quarter of the year ($5 million total) retroactively to January 1, 2026.

Meanwhile, municipalities are making contingency plans, such as potential hiring freezes, budget cuts, and other cost-cutting measures, which they hope will not have to endure.

“My priority is making sure our municipalities have the tools they need to succeed,” Kay said. “Therefore, my colleagues and I have been working hard to ensure that the legislation allowing tax sharing to continue without any gaps moves swiftly toward passage. I am confident that the county will take all necessary steps to ensure this issue never arises again.”