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Long IslandColumnistsJoye Brown

Tax revenue declines put spotlight on Nassau's budget plan

Nassau County Comptroller George Maragos on June 12,

Nassau County Comptroller George Maragos on June 12, 2013. Photo Credit: Howard Schnapp

Looks like Nassau and Suffolk are going to have some unexpected juggling to do with both their budgets.

But while Suffolk's elected officials were specific on their planned response, Nassau's -- characteristically, alas -- seemed to be all over the place.

Nassau County had an unexpected drop in sales tax revenue for a second fiscal quarter in a row -- an overall 9 percent dip for the first half of the year.

In Suffolk, meanwhile, sales tax revenue remained flat over the same time period.

Why should Long Island residents care?

Sales taxes in both counties account for the lion's share of revenue -- greater even than money property owners generate by paying the county portion of the property tax bill.

In Nassau, sales taxes account for some 42 percent of budgeted revenue; in Suffolk, it's even higher, at 47 percent.

Those pennies on every dollar bound for the counties, then, are essential to keeping every local service, from parks to police, going. Which means that Long Island's counties run not on the most stable of revenue -- property taxes -- but on the most volatile.

Last year, when Suffolk and Nassau saw higher-than-anticipated increases in sales tax revenue, there seemed reason to rejoice.

Some analysts -- and with them most of the region's politicians -- took that as a hopeful signal that Long Island's economy, which was late to feel the Great Recession's impact, was finally turning around.

Last week, however, two reports on Nassau noted that 2013 may have been an aberration -- with temporary sales tax revenue increases fueled by increased consumer spending post superstorm Sandy.

In response to the unexpected slowing in county sales tax revenue, Suffolk, on advice of an outside fiscal consultant, lowered projected sales tax growth projections from 3.63 percent to 2.45 percent for the year -- a logical move that nonetheless would result in a $15 million sales tax shortfall.

And that's with an overall budget gap anticipated to be up to $170.3 million next year. Suffolk is leaving more than 100 jobs unfilled, even as County Executive Steve Bellone and lawmakers consider other potential cutbacks.

In Nassau, Comptroller George Maragos sounded the alarm, asking Nassau's elected officials and a state control board to address the sales tax shortfall.

"Failure to act will be dire," Maragos said, noting that the loss of sales tax revenue coupled with increased costs of recent labor agreements and overtime has exacerbated the county's finances.

Chris Wright, a member of the Nassau Interim Finance Authority, the state control board, sounded just as urgent. "We need a course correction . . . and NIFA will need to be a prudent fiscal control board, not a time machine back to fiscal practices of the 1990s."

How will Nassau -- which already has raised fees and is planning on installing school-zone speed cameras -- respond? Democrats in the county legislature want an emergency budget review committee meeting, which Republican lawmakers say is unnecessary.

All of which means, stand by.


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