Villages across Nassau could stand to lose thousands in county sales tax revenue if the legislature votes to eliminate the local government assistance program, which affords villages the opportunity to dip into county sales tax revenue streams.
Stewart Manor could stand to lose 5,300. In addition to this loss, the village is also seeing a huge decrease in mortgage tax revenue, which is currently half of what the village saw last year, according to its village clerk. Stewart Manor's neighbor, the Village of Floral Park, could take a $44,000 hit if the program is eliminated.
"This proposed action is especially galling since these monies promised by the county had already been budgeted in our 2009-2010 budget," Floral Park Mayor Phil Guarnieri noted in a recent mayor's column. "But to have the county potentially reverse course, at the eleventh hour, and instead of a just recompense, we find ourselves mugged, our pockets picked, with nothing to show in return but the cold blade of a stiletto in the back is nothing less than an outrage to propriety and the protocols of decency and fair play."
When Mayor Guarnieri first ran for village trustee, he made it his mission to secure a percentage of the revenue for Floral Park. Back in 2002, he and his fellow board members were successful. "I recognize that the county needs to address these shortages but it is a poor excuse to confiscate legal tender that rightfully belongs to us. Our residents pay the same sales tax everyone else does and not an iota of a percentage less. The minority leader of the county legislature, Peter Schmidt, was right when he stated that the villages had budgeted for that money and hence it is a contract, an obligation the county should meet," he said.
The mayor said he was anxious to communicate his village's concerns at a March 9 public county hearing. That hearing, however, was cancelled. Mayor Guarnieri is imploring the county to reschedule the hearing to afford public comment on this issue, which was supposed to go before the full county legislature March 23. The item, however, never came up. The next meeting of the Nassau County legislature was scheduled for Thursday, April 2 at 10 a.m. (committee meetings begin at 2 p.m.).
According to County Comptroller Howard Weitzman, sales tax accounts for approximately 40 percent of Nassau County's budget. And in these economic times, every dollar counts.
County Executive Tom Suozzi said he's always supported the program, even increasing the proportionate share that the county paid to villages back in 2002 when he first took office.
He would like to fund $30 million of Nassau's deficit through three specific revenue-generating bills: a cigarette tax, red light cameras and a TPVA (Traffic and Parking Violations Agency) surcharge.
All the county needs is state authorization; these bills would not cost the state any money, Suozzi said. If the county does not receive authorization to enact these bills, Nassau will be forced to end its exemption for sales tax on home energy sources and reduce or eliminate funding to various programs, including the local government assistance program for villages.
County Comptroller Weitzman, who's been keeping a close eye on what he's described as the county's sales tax "free fall," is attempting to drum up revenue by allowing delinquent taxpayers to "come clean" and pay back state taxes now through a new program dubbed the Voluntary Disclosure and Compliance program. He discussed details of it during a March 19 press conference.
From November 2008 to March 5, 2009, the comptroller said sales tax declined 7.5 percent, resulting in a $30.2 million loss when compared to the same period last year. Since the start of 2009 alone Weitzman said the sales tax free fall has translated into a $6.5 million decrease.
Weitzman said that the latest sales tax receipt sets the stage for a devastating start to 2009. "Nassau County is not exempt from the national drop in retail sales, the loss of jobs, the reduction of bonuses on Wall Street and other factors that stimulate Nassau's economy," he said.
If sales tax receipts continue at this rate, the comptroller's office projects that the county, for 2009, will receive approximately $936 million in sales tax revenue, which Weitzman said is approximately $100 million less than the amount the county budgeted for.
"This just highlights the need for the county to act quickly and decisively to close the 2009 budget gap," Weitzman said in a recent press release, "which is projected to be as high as $150 million. Relief from the federal economic stimulus package and the much-discussed deficit-closing measures of the administration can't come fast enough."