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, by law, affords villages the opportunity to dip into county sales tax revenue streams.
Garden City stands to lose $60,000, while its neighbor, the Village of Stewart Manor, could take a $5,300 hit. In addition to possibly losing money from county sales tax revenue, Stewart Manor is also seeing a huge loss in mortgage tax revenue, which is currently half of what the village saw last year.
Sales tax accounts for approximately 40 percent of Nassau County's budget and in these economic times, every dollar counts. The issue never went before the full legislature at the March 23 meeting. The next meeting is scheduled for Thursday, April 2 at 10 a.m. (committee meetings begin at 2 p.m.).
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.
"I do not want to eliminate this assistance program but it is a reality we may face," he stated in a March 4 letter sent to Garden City Mayor Peter Bee. "Unfortunately, in these difficult financial times, the county is no longer in a position to continue funding this program absent a new revenue source."
Suozzi said 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 we need from the state is authorization," he said. "These bills would not cost the state any money. If we do not receive authorization to enact these bills, we will be forced to end our exemption for sales tax on home energy sources and reduce or eliminate funding to various programs, including the local government assistance program for villages."
According to Suozzi's letter to Bee, Senator Craig Johnson brought state Senate Majority Leader Malcolm Smith to meet with him. "It is very encouraging that these leaders have pledged their support, but in order to be successful we also need help from the other state senators, including the local Republicans," Suozzi stated in his letter.
Senator Johnson could not be reached for comment at press time.
County Comptroller Howard 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 - without penalty - through a new program dubbed the Voluntary Disclosure and Compliance program. He discussed details of the program 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."