Midyear sales tax revenue across Long Island has increased over last year, but Suffolk’s sales tax collections grew at more than double the rate of Nassau’s revenue, county officials have reported.
Sales tax collections in Nassau for the first half of this year grew by 1.7 percent compared with the same period last year, while Suffolk’s revenue increased 3.83 percent, according to the quarterly “adjusted” sales tax checks received by the counties from the state. The adjusted checks reconcile earlier estimated checks. County officials reported the figures Friday.
If the growth rate remains unchanged in Nassau for the rest of this year, the county will face a more than $7 million shortfall in budgeted sales tax revenue, according to the legislature’s budget review office. Nassau budgeted a 2.5 percent increase in sales tax this year.
Robert Lipp, director of Suffolk’s budget review office, said if Suffolk's sales tax growth continues at its current rate, the county will be short about $2.7 million at year’s end. The county had forecast an overall 3.93 percent sales tax increase in this year’s budget.
Maurice Chalmers, Nassau’s budget review director, said in a report to the legislature that the county’s 2019 budget “was heavily leveraged on achieving additional sales tax revenue and it is very important that the county continue to monitor sales tax collections.”
Justine DiGiglio, spokeswoman for County Executive Laura Curran, said in a statement that the county already anticipated lower sales tax collections. “In the midyear budget plan published by the county just a couple of weeks ago, we reduced the forecasted sales tax by $4 million for the 2019 fiscal year. We will continue to monitor the sales tax closely over the next few months.”
Nassau Comptroller Jack Schnirman last week said an increase in sales tax collections last year helped to pare the county’s overall budget deficit. He said in a statement Friday, “We said we are keeping a close eye on sales tax when we released the county’s annual financial report to see if its growth would be sustainable.”
He said internet sales tax collections, which began in June, could help the county meet its budget.
Sales taxes provide 38.7 percent of the revenue in Nassau’s budget of $3.215 billion, Schnirman’s office said.
County officials did not explain the difference in sales tax growth rates between Nassau and Suffolk.
Economist Martin Cantor, director of the Long Island Center for Socio-economic Policy, gave several reasons why the economic growth in Suffolk is higher than in Nassau.
He said Suffolk has 62,000 more people employed than Nassau, while Nassau has more people who commute into the city for their jobs. Commuters tend to spend money where they work, and younger workers stay in the city for their after-work entertainment, he said.
Also, Suffolk has more big-ticket construction projects and more tourism than Nassau, he said.