Sales tax collections in Nassau, which received its quarterly adjusted check Friday afternoon, are up 6.4 percent through May of this year compared with the same period last year - much higher than the 1.75 percent budgeted for 2010.
If collections continue at this rate in Nassau, the increase should make up for the elimination of the 2.5 percent home heating tax and could result in a small sales tax surplus by the end of this year, said Nassau's budget review director Steve Antonio. "This is good news," he said.
In Suffolk, sales tax collections are up 4.96 percent through May compared with last year.
The county budgeted a 4 percent increase for the year, but budget director Eric Naughton declined to project the year-end results.
Because both counties rely heavily on sales tax to balance their budgets, an increase - if sustained - could ease the pressure on officials to raise property taxes or cut services.
"Taxpayers should care about increased sales tax collections because that had a direct positive relationship on lower property taxes," said Martin Cantor, director of Dowling College's Long Island Economic and Social Policy Institute.
But Cantor and county officials were quick to say it was too soon to conclude that good times were back on Long Island.
Suffolk County Executive Steve Levy, who just last month faced a $5 million reduction in sales taxes because of a state mistake, said, "This continues to illustrate the extraordinary volatility of sales tax collections, which is a roller-coaster ride that reminds us to hope for the best but plan for the worst."
Nassau County Executive Edward Mangano, who has predicted a $286 million budget deficit next year, said, "We're cautiously optimistic that sales tax revenue will exceed projections and help us reduce the deficit."
For some Nassau Democrats, the new sales tax numbers indicate that Republican Mangano has painted too dismal a portrait of Nassau's finances.
The numbers show "that no matter what the spin is, this year's budget was and is balanced, and Mangano's doom-and-gloom estimates of next year's deficits are overstated so that anything short of disaster will look like a success," said Legis. David Denenberg (D-Merrick).
But Mangano's top financial aide, Deputy County Executive Tim Sullivan, said, "We're not close to being out of the woods," noting Nassau will not get $22 million in expected federal Medicaid money.
County officials have yet to analyze the sales tax numbers, but Cantor suggests that the federal home tax credit could have boosted the number of big purchases, such as appliances and furniture.
Marilyn Schulman said she has seen a 12 percent rise in sales in the last year at her Bay Shore gift store, the Willy Nilly Trading Co., and recently hired another person.
But her lighting fixture business, Bay Shore Lighting and Home, is simply holding its own.
The main reason for the difference is the gift store sells affordable indulgences.
"People need to entertain themselves with us," Schulman said of the gift store. "They need to get out and feel a little better."