Sales tax collections in Nassau and Suffolk are up nearly double expectations for the first half of this year, reflecting positive economic growth on Long Island, according to financial analysts for both counties.
Suffolk has collected $631 million in sales tax revenue so far this year, a 5.4 percent increase over the same period last year, said Eric Naughton, county budget director.
Nassau brought in $532 million in sales taxes through May, a 4.4 percent increase over the same period last year, Maurice Chalmers, director of the county legislature’s budget review office, reported in a memo to legislators.
Both Naughton and Chalmers cited Long Island’s strong economy for the growth in sales taxes.
Naughton said Suffolk had budgeted a 3 percent sales tax increase this year. “Right now we’re comfortable saying that we should get 4 percent, and after analyzing some of the data, we may increase it a little more.”
In Nassau, Chalmers said even if sales tax revenue remained stagnant for the rest of the year, the county would still see a $2.2 million surplus. If sales taxes grow an expected 2.5 percent, Nassau would realize an $18.6 million surplus, he said. However, accounting restrictions would prevent the county from using $7.6 million of the surplus until 2019.
Chalmers’ memo said, “A review of current local economic indicators reveals support for continued positive economic growth.” It cites a near-record unemployment rate of 3.4 percent in Nassau; a 6 percent increase in construction jobs on Long Island; an increase in national retail sales of 0.8 percent and a 2.3 percent increase in regional consumer prices through May.
Naughton noted higher gas prices also boost sales taxes while unemployment in Suffolk was 3.6 percent in May, compared with 4.2 percent a year earlier.
Nassau County Executive Laura Curran said in a statement: “It’s encouraging to see higher-than-expected sales tax revenue. I will continue to move forward with my economic development vision and reform the broken assessment system to get our financial house in order.”