County Cuts Sales Tax Aid To Villages

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Villages throughout Nassau County were blindsided by the news last week that they would not be receiving their annual share of $1.25 million from sales tax revenues normally shared by the county because those funds were eliminated from the budget by County Executive Ed Mangano’s office when the Nassau County Interim Finance Authority (NIFA) mandated $36 million in budget cuts after the 2017-18 county budget was submitted for its review last year.

Many village clerks became aware of the financial shortfall when they contacted the county treasurer’s office to process the vouchers they are required to submit each year to obtain the funds that are distributed by the county based on the population in each village. And village trustees learned of the shortfall one month after they had approved budgets, assuming the funds would be received from the county.

“We are shocked to learn—after our village budget was adopted—that Nassau County has eliminated the villages’ share of sales tax revenue, while leaving the towns and cities their shares. It leaves us with a large hole in our budget that our village taxpayers will need to absorb somehow. If the county had told us about this when it passed its own budget last year, at least we could have planned for this loss,” Mineola Mayor Scott Strauss said in a statement. “I understand the county’s need to balance its troubled budget, but it shouldn’t do so on the backs of village taxpayers.”

The Village of Westbury lost out on $42,084 in sales tax aid, however, village officials factored this in when drafting and adopting their 2017-18 budget, marking it as a revenue loss.

“We knew last year it was in jeopardy, but they restored it, this year it was in jeopardy again but we knew it wasn’t going to be resolved because of the county’s fiscal trouble,” said Westbury Mayor Peter Cavallaro, adding that this year’s budget was one of the most difficult to do. “I understand why they eliminated it, but we were very disappointed to lose it. Sales tax is generated by our retail business so for us to not have any share seems inequitable.”

Brian Nevin, a spokesman for Mangano, said the sales tax aid for villages was in the original budget formulated by the county executive. But he said the county legislature’s amendments caused certain revenues to be considered at risk by NIFA, which subsequently mandated cuts. Nevin said if the revenues are restored, the sales tax aid to the villages may also be restored to the county budget.

Eric Naughton, deputy county executive for finance, enumerated what NIFA required and indicated it was the village officials’ responsibility to keep track of what funds would be available to them.

“NIFA mandated $36 million in cuts and this savings was recommended by the Office of Management and Budget. Any finance professional knows that it is incumbent on the receiver of funds, whether they are a not-for-profit or a municipality, to verify that they will receive funding in the future,” Naughton said.

The 2017-18 county budget was ultimately reduced from $2,983,433,140 to $2,970,979,140.

A NIFA spokesman declined to comment on the budget cuts.

County Legislator Richard Nicolello, deputy presiding officer in the legislature, said the legislators had decided to cut the fee attached to moving traffic violations from $100 to $50, which he said was one factor that prompted NIFA to question anticipated revenues in the budget and require the county administration to make cuts.

He said he is hopeful that the sales tax aid may be restored.

“To satisfy NIFA this is a decision the administration made. We consider this aid to the villages important. We would like to restore it,” Nicolello said.

In a statement, county legislative minority leader Kevan Abrahams said, “Instead of solving the Mangano manufactured fiscal crisis here in Nassau by tightening his own belt, he chose to pass the burden to village government instead by cutting the shared sales tax. What’s even worse was there was no communication from the administration to contact the villages leaving them in the dark and unable to prepare for their budgets that were already put in place for 2017. Now, the continued Mangano Republican mismanagement isn’t just affecting Nassau, but every village in our county.”

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