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Nassau sales taxes down by nearly 6 percent

Nassau County Comptroller George Maragos at his Massapequa

Nassau County Comptroller George Maragos at his Massapequa office on March 19, 2013. Photo Credit: Howard Schnapp

Nassau's economy continued to sputter, with county finance officials reporting Friday that sales tax collections are down 5.8 percent so far this year compared with the same period last year.

County Comptroller George Maragos reported that if collections continue at the same rate through the rest of the year, Nassau will have a $90 million shortfall in its projected sales tax budget of $1.166 billion.

Maragos has urged the county to reduce its budget projections since first-quarter collections plummeted an unprecedented 14.8 percent compared with last year.

"Although the administration has made attempts to modify the budget due to this sales tax decline, the sluggish economy has been a major hindrance," he said. "Flat consumer income growth and shifts to online purchasing continue to look like the new norm."

The county legislature's bipartisan office of budget review also warned in a memo about the decline in sales tax collections, which are down $47.4 million over last year. Director Maurice Chalmers projects the county will have a $70 million shortfall in sales taxes this year if collections remain flat for the rest of 2014.

Chalmers said 2013's sales tax collections likely "were artificially inflated due to the rebuilding efforts immediately following superstorm Sandy," which hit in late October 2012. He predicted the county's collections would return to a more normal level when Sandy rebuilding is substantially complete.

Over the past 10 years, the county has experienced an average annual growth rate of 2.3 percent, officials said. Chalmers indicated in a chart that if the county's sales taxes grew by that amount, the county would still have a shortfall of more than $60 million.

County Executive Edward Mangano's administration has projected a $51.5 million shortfall and built its projected 2015 budget based on that number.

Tim Sullivan, Mangano's deputy county executive for finance, said, "The current trend is consistent with the county's 2015 budget projections," and that Maragos' "estimate fails to discount the impact from the winter of 2014, which severely impacted sales throughout the Northeast."

Legis. Delia DeRiggi-Whitton (D-Glen Cove) said, "We need to stop counting on money that is not there and not going to be there next year and acting like that is balancing the budget. The sales tax revenue has been declining for the past year, and it's time we begin to stop the spending and use accurate projections to prepare for Nassau's future."

In Suffolk County, sales tax revenue year to date are up 1.91 percent, below the 3.62 percent increase the 2014 budget had forecast. To meet projections in the 2014 budget, sales tax would have to grow by $399.7 million, or 7.8 percent, for the rest of the year.

Suffolk County Executive Steve Bellone's proposed 2015 operating budget, unveiled last month, reduced 2014 sales tax growth estimates to 2.74 percent, which would require only a 4.82 percent growth for the remainder of the year.

With Rick Brand

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