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LI sales tax rise may mean better economy

Shoppers buy a luxury purse on Feb. 3,

Shoppers buy a luxury purse on Feb. 3, 2011. Photo Credit: Getty Images

In a sign that the economy may be finally looking up, Nassau and Suffolk counties Thursday reported collecting more money in sales tax last year than in the year before.

In 2010, Nassau County collected $1 billion, 6.7 percent higher than in 2009, said Comptroller George Maragos.

Suffolk reported $1.1 billion in sales taxes - 6.9 percent higher than the year before.

Reflecting rising unemployment and consumer fears, both counties had seen sales tax revenue decline during the previous two years - 2008 and 2009.

The numbers brought expressions of optimism.

"The economy is expected to continue its steady improvement during 2011 and with it the consumer purchasing momentum, which should result in higher sales tax revenues," Maragos said. He projected sales tax revenue would increase in 2011 by 3.75 percent or $38 million.

Martin Cantor, director of the Long Island Economic and Social Policy Institute at Dowling College, said that "what it basically shows is that Long Island is on an upward improvement track and moving out of the recession. Consumers are back to spending, which means that more are finding jobs."

Pearl Kamer, chief economist at the Long Island Association, a civic and business group, cautioned that rising gasoline and energy prices could limit spending.

In Nassau, the release of the data came wrapped in politics.

The Nassau Interim Finance Authority, a state oversight board, voted last month to take control of the county's finances after months of wrangling with county Executive Edward Mangano over the soundness of his $2.6-billion budget.

Mangano contends his budget is balanced; NIFA says it contains a $176-million deficit.

"This is further proof that Nassau County is nowhere near the deficit that NIFA has alleged," said Peter Schmitt (R-Massapequa), presiding officer of the Nassau County Legislature, said of the sales tax numbers.

Legis. David Denenberg (D-Merrick), a finance committee member, called the increase in sales tax revenues "good news that I hope the county executive uses to help close the . . . deficit in his 2011 budget."

NIFA chairman Ronald Stack could not be reached.

In Suffolk, the upswing is tempered by looming state budget cuts, said Dan Aug, spokesman for County Executive Steve Levy. Levy told the county budget director and staff to set aside in reserve up to 10 percent of non-mandated expenditures. Aug said caution is still needed, though the rise in revenue made it more likely the county will collect as much money this year as it assumed in writing the budget.

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