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Nassau forecasts nearly $90M sales tax shortfall

A new fiscal report says last year's sales tax revenue in Nassau County could be down by as much as $89 million, but there has been little indication to date on how the county executive, Edward Mangano, plans to address the issue.

Nassau County has two sales tax adjustments checks for 2009 in the pipeline from the state, but even with that the county is on a pace to end 2009 down $85 million to $89 million, according to Steve Antonio, director of the Office of Legislative Budget Review.

A report from Antonio's office Thursday was mostly bad news about sales tax receipts for 2009. But it did say the county could possibly meet its target in the 2010 budget, which anticipates a 1.75 percent growth.

"One of the ways the county executive is closing the gap is a smaller administrative payroll," Mangano spokesman Michael Martino said in a statement Thursday. He declined to elaborate.

Suffolk County Executive Steve Levy said he faces a sales tax gap of $66 million for 2009 and 2010, and ordered department heads this week to prepare to cut discretionary spending by 10 percent to save $40 million. Suffolk has a $2.4-billion budget.

Mangano, who took office on Jan. 1, has said he will show within two months how he will cut the $2.6-billion budget to make up the $19 million in revenue the county will lose this year because of his repeal of the sales tax on home energy use.

He may also have to deal with a possible shortfall of $16 million in anticipated revenue from a proposed county cigarette tax. That revenue became less likely when Gov. David A. Paterson proposed a new state cigarette tax to help balance the state budget.

Antonio's report laid out a good-news, bad-news menu of possibilities that included:

A spike in crude oil prices could dampen a recent increase in consumer confidence and result in fewer trips to the mall, and therefore fewer purchases and less sales tax.

A tight credit market could keep the lid on consumer spending.

Pent-up demand for cars could rebound.

"The Nassau County economy is expected to slowly recover in 2010 . . . ," the report said. "However, it appears that it will take some time before Nassau's economic indicators reach their 2008 levels."

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