Glen Cove to collect 1.5% sales tax directly, changing decades-old arrangement

Glen Cove will collect a 1.5% tax on all sales in the city, shifting from a decades-old practice in which Nassau County collected the revenue that was used to offset property taxes.

 City The city council voted 4-2 last week to pre-empt sales taxes, meaning it will collect a portion of the revenue directly. That's a shift from the arrangement since 1988 in which the county has collected all of the sales tax up front. It then gives the city a credit that's taken off the property tax levy.

That rebate will end next year, but Glen Cove will be able to apply the sales tax revenue it receives to fill budget gaps and fund city services, officials said. 

Councilwoman Marsha Silverman and Councilman John Zozzaro, both Democrats, voted against the measure. Councilwoman Danielle Fugazy Scagliola, a Democrat, abstained.

For years, Nassau County has collected local sales taxes and shared part of the proceeds with municipalities, including its two cities: Glen Cove and Long Beach, according to the State Comptroller's Office.

City officials say the change will result in a recurring revenue stream that can address shortfalls that arise from growing expenses, such as health care and pension costs. 

Glen Cove Controller Michael Piccirillo said Glen Cove received $2.4 million in property tax credits in 2023, $2.6 million in 2024 and $2.6 million in 2025. Those totals were deducted from the city portion of the county tax levy.

"There’s an opportunity here to get a multimillion dollar revenue stream that we can use to offset all of our normal city services," Piccirillo said during the hearing.

Rebate versus revenue stream

When the change takes effect on March 1, the city will start receiving 1.5% of sales tax proceeds and apply it to its general fund. The change doesn’t increase the overall sales tax in the city, which is 8.625%. That figure includes a 4% state sales tax, a 4.25% county tax and a 0.38% transit tax, city officials said.

Tip Henderson, the city attorney, said the change will give Glen Cove more flexibility.

 Henderson said  he couldn't predict how the change would affect Glen Cove property owners' taxes or city finances.

"But certainly I think everybody here would like to see the city taxes go down," he said.

Glen Cove had pre-empted sales tax revenue beginning in 1979 but the city changed course in December 1987 following a contentious mayor's race, Newsday reported at the time. Outgoing Mayor Vincent Suozzi, a Democrat, pushed through GOP Mayor-elect Donald DeRiggi's request to repeal that policy. Collecting sales tax revenue directly cost the county millions of dollars in tax credits, DeRiggi argued at the time, according to previous Newsday reporting.

Democrats say 'tax hike'

Silverman, who is running against incumbent Pamela Panzenbeck for mayor in November, sought to table the resolution last week. The motion failed. She said residents and members of  city council had outstanding questions and little time to review the proposed change.

Silverman said removing the property tax rebate equates to a "tax hike."

"It’s not free money," Silverman said. "This is 100% a tax hike to property owners in Glen Cove, so not only is it on the back of our residents, it is taking away something that was a benefit to our residents."

John Perrone, a Glen Cove Democrat who is running for a council seat, said the shift represented "a bait and switch on taxes."

He noted during the meeting the change will fall "on the taxpayer’s back because we’re losing a credit."

Panzenbeck during the meeting said the effect on property taxes will be minimal.

She called the shift "a great opportunity for us to have a recurring revenue stream." She added the policy could be rescinded if the measure "doesn’t work out."

By Joseph Ostapiuk

joseph.ostapiuk@newsday.com@OstapiukJ