Glen Cove adjusts revenue projection, relying less on uncertain sales tax revenue

Glen Cove officials slashed revenue projections for a proposed 4% tax on hotel and motel stays, citing concern about whether the tax would be approved.

Next year's budget relies on $136,000 from the proposed hotel and motel tax. That's down from an earlier projection of $286,000. The tax is not guaranteed to provide the city revenue next year; it still requires approval from the State Legislature and then the governor's signature.

The 4% hotel and motel tax would be an added charge for each night stayed at facilities that offer lodging in the city. Currently, the only hotel that qualifies is The Mansion in Glen Cove, officials have said.

The city's budget hikes the tax levy by 1.8%, which does not exceed the state tax cap, officials said.

During Tuesday night’s city council meeting, Republican Mayor Pamela Panzenbeck moved to lower the hotel/motel tax projection to $136,000. To make up the difference, the budget estimated $150,000 in traffic court revenue. The change was unanimously approved. 

On Sunday, Newsday reported that the city planned to include the tax in its budget despite the lack of state approval. 

“After some additional review and some meaningful feedback from city council members, I decided to make a minor revision between two revenue fund lines,” said Panzenbeck, who acknowledged the revenue could take longer to materialize than expected. 

"We do anticipate a date of April, but to be more conservative we included a potential date of August to allow additional time," Panzenbeck said. 

The council voted 3-3 on the $70.7 million spending plan for next year. Four votes are required to approve the budget. It was adopted by default: According to the city's charter, the budget is automatically adopted following the fourth Tuesday in October.

Democratic City Councilman John Zozzaro said he’s “concerned about where we’re going to be with our final number at the end of 2027,” before voting no on the budget.

Republican Councilman Michael Ktistakis said the budget responsibly accounts for rising costs and other financial pressures.

“This is an investment in keeping our community thriving,” Ktistakis said.

The city has struggled with its finances in recent years.

In September, the state Comptroller's Office added the city back to its fiscal stress list, nearly two years after emerging from it. The office characterized the city as being "susceptible" to fiscal stress.

Earlier this year, Moody’s, the credit rating agency, downgraded Glen Cove's bond rating over a $3.1 million sales tax shortfall.

Officials had budgeted $3.1 million in sales tax proceeds as part of its 2026 spending plan. That money was to come from Glen Cove directly collecting a cut of sales taxes generated within the city. For decades, Nassau County has collected the city's share up front before offering Glen Cove a property tax credit.

But the city did not received a waiver from Nassau County so the change could take effect this year.

Councilwoman Danielle Fugazy Scagliola, a Democrat, said the city was once again depending on a shaky revenue source.

“We are facing the same situation where we have this hotel tax that we really don’t know if that’s going to come through,” said Fugazy Scagliola, who voted no on the budget.

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.