Karen Smith, Brooklyn. Black Friday shoppers at Green Acres Mall,...

Karen Smith, Brooklyn. Black Friday shoppers at Green Acres Mall, Sunrise Highway, Valley Stream, NY on Nov. 23, 2017. Credit: Corey Sipkin

Sales tax collections have climbed above budget in both Suffolk and Nassau counties so far this year as a result of increased employment and healthy consumer demand, particularly for housing, officials said Friday.

 Suffolk officials report that adjusted sales tax revenues for the first three quarters of 2018 are up 5.36 percent over the same time last year. Suffolk had projected a 3 percent increase in this year’s budget.

In Nassau, sales tax collections have jumped 4.1 percent over the same period. The county had budgeted a 2.5 percent growth rate for 2018.

Maurice Chalmers, director of Nassau’s office of legislative budget review, said revenues should exceed projections this year and the county “is on track to achieve” the sales tax revenues included in County Executive Laura Curran’s projected 2019 budget.

In a report to the legislature, Chalmers wrote, “A review of current local economic indicators supports the continued positive economic growth for the remainder of FY18 and throughout FY19.” He said Nassau saw an increase in home sales and jobs in August, compared to August a year earlier.

Suffolk County Executive Steve Bellone, in his proposed 2019 $3.1 billion operating budget, now forecasts that the county will see a 4.9 percent increase for this year and a 3.5 percent increase for 2019. The county legislature begins hearings in the coming week  to consider amendments to his spending package

 With Suffolk's third-quarter sales tax receipts showing 5.23 percent growth,  Robert Lipp, director of budget review, said he largely agrees with Bellone’s projections and the county will need only 3.825 percent sales tax growth for the rest of the year to reach the 4.9 percent figure. Those projections, Lipp added, will generate an additional $25 million in revenue this year and $75 million in 2019.

Presiding Officer DuWayne Gregory (D-Copiague) said the latest sales tax numbers are “good news” and bring “more certainty” to the forecasts made in Bellone’s budget. However, lawmakers and analysts warned uncertainty in the economy may make continued robust growth unsustainable in the long run.

Legis. Tom Cilmi (R-Bay Shore), GOP caucus leader, said any extra money should go to plugging long-standing holes in the county budget. “We still have a mountain of debt to dig our way through,” he said. “What we should be doing is paying off our debts and not looking to grow our expenses.”

 Marty Cantor, director of the Long Island Center for socio-economic policy, attributed the growth to two factors: “More Long Islanders are working even though many have second jobs. It’s not because wages are growing up.” The other reason, he said, “is home sales. When houses are sold, people buy durable goods, refrigerators, stoves, tiles and things like that.”

He predicted sales taxes would fall off if the stock market continues to drop because people likely will curtail spending and hold on to their cash. 

Chalmers said if revenues grow just 2 percent for the rest of the year, Nassau will still end 2018 with a $21.4 million surplus in sales taxes.

“However, since the proposed FY 19 budget relies heavily on sales tax growth, this continues to be an area which must be closely monitored and may warrant changes should economic conditions change,” his report concluded.

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