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DiNapoli: Sales taxes to local governments fall 32% statewide 

A sign on the front door of a

A sign on the front door of a wine and liquor store at the College Plaza shopping center on Middle Country Road in Selden, indicates that it's closed until further notice on Friday, April 3, 2020. Credit: Newsday/John Paraskrvas

ALBANY — Sales tax revenue for local governments dropped 32.2% in May compared with the same month last year, including a 33.6% drop on Long Island, according to state Comptroller Thomas DiNapoli.

Statewide, that means sales tax revenue in May collected by local governments was $918 million, or $437 million less than in May 2019, DiNapoli said Friday.

“We anticipated that sales tax revenues would continue to drop because of COVID-19, but the May sales tax figures show just how deep it is cutting into municipal finances,” DiNapoli said.

For taxpayers, the drop is a concern because sales tax revenue is a major source for counties and municipalities. Drastic reductions in sales tax revenue without a federal stimulus bill to fill the deficit means more pressure on governments to raise property taxes, which on Long Island are already among the nation’s highest.

DiNapoli said the sales tax revenue losses show the need for a package of aid from Washington to contend with the $13.3 billion deficit in the state budget, which funds local governments. Gov. Andrew M. Cuomo has said that without billions of dollars from Washington, the state budget would be cut 20%.

The outlook from Washington, however, is uncertain.

"The financial impacts on the state and local governments is deeply concerning," said David Friedfel of the nonpartisan Citizens Budget Commission. "Now is the time for the state and local governments to take decisive action to slow spending. Hopefully, as different regions of the state enter new phases of reopening, sales tax collections will begin to bounce back."

Statewide, sales tax revenue to local governments dropped 24.4% in April compared with the same month a year ago, and March sales tax revenue was down 3.7%.

The cumulative statewide loss to local governments was 19.2% during the period, or $824 million. The overall net decline was eased by online sales and because the state economy was hot before the virus hit with a 7.8% increase in year-to-year sales tax revenue in February after a 10.9% increase in January, DiNapoli said.

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