After robust spending drove up sales tax revenues on Long Island last year, initial collections are disappointing in Nassau this year while Suffolk is showing strong growth, county officials reported Friday.
Adjusted sales tax collections for the first quarter in Nassau were up by 2.1 percent over the same period last year, or $4.8 million more than in 2018, according to the legislature’s budget review office.
Because the 2019 budget anticipated a higher overall growth rate, Nassau officials say they need collections to increase by 2.6 percent for the rest of the year to avoid a sales tax shortfall. Sales tax revenues make up about a third of the county budget.
Chris Geed, a spokeswoman for Nassau County Executive Laura Curran, said, “It is still early in the 2019 fiscal year. We will continue to monitor the sales tax closely over the next few months.”
In Suffolk, sales taxes in the first quarter increased at nearly double the rate as in Nassau.
Suffolk fiscal officials said first quarter receipts grew by 4.03 percent, or $10.8 million more than in the same period in 2018.
Suffolk budget officials said the county sales tax must climb by 3.93 percent to meet this year’s budget projection. “We’re right on target,” said Mary Kate Guilfoyle, a spokeswoman for County Executive Steve Bellone.
Last year, sales tax revenue in Nassau increased by 3.3 percent and by 4.46 percent in Suffolk compared with 2017. But growth slowed in both counties in the final quarter.
Robert Lipp, director of Suffolk’s budget review office, said the county’s first quarter sales tax revenues appear to indicate, “the local economy is chugging along right now.”
But Nassau budget review director Maurice Chalmers, in a memo to county legislators, warned that economic forecasts predict a national growth rate in sales tax receipts of 2.2 percent.
While state legislation to allow internet sales tax collections “could compensate for the sluggish economic growth,” Chalmers wrote, this year’s budget “warrants close monitoring.”
Officials could not immediately explain the difference in collections between the two counties, but suggested the federal government shutdown, changes in the federal tax law and Industrial Development Agency sales tax exemptions may have impacted each differently.