City of Glen Cove back on state's fiscal stress list

Glen Cove is back on the state's fiscal stress list, nearly two years after coming off it and as the city faces a $3 million shortfall.

Glen Cove was labeled as “susceptible” to fiscal stress, according to the state comptroller's office, which analyzed the city's 2025 fiscal performance. The report uses a formula to calculate financial stability and gave Glen Cove the label because of an operating deficit sustained last year.

Officials said they are working to improve the city's outlook.

“We have been there before and will be laser-focused on reversing course and achieving positive operating results,” Glen Cove Controller Michael Piccirillo said in an email.

The state comptroller's office publishes the annual assessment as an "early warning of fiscal stress to local governments and school districts." Two other Long Island governments — Island Park and Huntington Bay — are also on the list. 

Glen Cove was removed from it in 2024 as city officials said they tightened spending to build a surplus. 

Then, in July 2025, the city council voted to pre-empt sales taxes — a move that would allow the city to collect 1.5% of sales tax directly. That signaled a shift from a decades-old arrangement in which the county collected all of the sales tax up front and gave the city a property tax credit. 

Later in the year, Mayor Pamela Panzenbeck advanced a budget that relied on the $3.1 million tax projection. The city council approved the spending plan, which froze the tax levy, days before the mayoral election. Democrats on the council criticized Panzenbeck, a Republican, for fast-tracking the budget with the uncertain sales tax estimate. 

The city didn't receive a waiver from Nassau County in time to begin collecting the revenue this year. That caused a hole in the budget, city officials have said. Moody's, the credit rating agency, cited the shortfall in downgrading the city's bond rating.

The sales tax pre-emption will take effect next March, according to a letter Newsday obtained from the state Department of Taxation and Finance.

Piccirillo said the city is hoping next year's sales tax revenue "yields better than anticipated results to help partially offset the shortfall.”

Councilman John Perrone said the downgrade and stress designation will hamstring the city’s ability to borrow in the near future. He added that the designation could complicate efforts to fund major infrastructure projects, like water treatment upgrades.

“Now you have to cover your debt service, which has increased,” Perrone said.

The move to include the sales tax revenue before it was confirmed “is kind of like running your household on the Christmas bonus,” he said.

By Joseph Ostapiuk

joseph.ostapiuk@newsday.com@OstapiukJ

Joseph Ostapiuk covers the Town of Oyster Bay and the city of Glen Cove. He joined Newsday in 2023 after spending more than six years at the Staten Island Advance.