Linda Alvarez, of Ronkonkoma, pumps gas in Ronkonkoma on Wednesday,...

Linda Alvarez, of Ronkonkoma, pumps gas in Ronkonkoma on Wednesday, Feb. 9, 2022. Higher gasoline prices helped drive a dramatic increase in sales tax revenues in Nassau and Suffolk counties in 2021, budget officials said. Credit: James Carbome

Nassau and Suffolk counties saw dramatic rises in sales tax revenues in 2021, as increased consumer spending and rising prices helped produce multimillion-dollar surpluses in county budgets, legislative budget officials said.

Suffolk logged a record $1.82 billion in sales tax revenues in 2021, $343 million more than in 2020, the county legislature's Budget Review Office said Tuesday.

Nassau took in nearly $1.45 billion in sales tax last year, $267 million more than in 2020, according to a memo by Nassau’s Office of Legislature Budget Review.

Overall, Nassau received $426 million more in sales tax revenue in 2021 than was budgeted, while Suffolk received $413 million more than expected, officials said.

"We’re really in the best position we’ve been in years," Lance Reinheimer, Suffolk’s budget review director, told county legislators Tuesday. "The future, in terms of county finances, looks rock solid."

The jump in sales tax revenues in Nassau and Suffolk tracked with statewide trends, according to a recent report by state Comptroller Thomas DiNapoli’s office.

Local governments collected $3.1 billion more in 2021 than in 2020, with most counties seeing double-digit percentage increases, according to the report.

Analysts have attributed the rise in consumer spending to pent-up demand after the lifting of 2020 pandemic restrictions, as well as higher prices for gasoline, housing and other categories because of supply chain issues and inflation.

Residents also had more pocket money from federal pandemic relief programs, including stimulus checks, direct child tax credit payments and increased unemployment benefits, Suffolk’s Budget Review Office said.

In a statement Tuesday, Suffolk County Executive Steve Bellone, a Democrat, called the increase in sales tax receipts "a positive sign that Suffolk continues to be on the rebound from the economic damage caused by the COVID-19 pandemic."

Republican Nassau County Executive Bruce Blakeman attributed growth in sales tax revenues in 2021 in part to fewer COVID-19 restrictions.

"Nassau County is normal again, and our small businesses are filled with local residents and shoppers from places like Queens that still impose restrictive COVID mandates," Blakeman said in a statement.

Legislative budget officials in both counties warned that consumer spending could decline in 2022 if inflation and higher interest rates squeeze purchasing power.

The officials also cited variables such as the Ukraine crisis and the possibility of new economic restrictions if another coronavirus variant spreads.

"It's encouraging to see that the economy is still growing, and people are still spending money," Suffolk County Legis. Kevin McCaffrey (R-Lindenhurst), the legislature's presiding officer, said of sales tax revenues.

But McCaffrey noted concerns that rising sales tax revenues "could be short-lived."

Nassau's budget review office said a decline in sales tax receipts was "unlikely" this year.

Officials there noted that "consumer purchases started strong in 2022," with a 9.5% increase in sales tax receipts in the first three weeks of January, compared with that period in 2021.

In Suffolk, legislative budget officials on Tuesday projected sales tax revenues would rise by 2% in 2022 — $35 million more than budgeted — due in large part to higher gas prices.

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