Nassau County Comptroller Jack Schnirman released a report this month projecting a large loss in tax revenue for the county and potentially tough budgeting choices.
The report showed that around 40% of the county’s revenue has come from sales tax historically, and with many retailers and eateries forced to shut down because of the coronavirus, the county is projected to lose $156 million to $360 million in 2020 revenue.
Schnirman said the fiscal hole that the county is facing is “larger than anything (it’s) faced in recent memory.”
“We’re all in this together,” Schnirman said. “The only way forward is to get this virus under control.” He added that getting the virus under control would get people back to work and begin to alleviate economic stress.
The report also said that if a second wave forced another shutdown of the economy, the losses would likely add up to $665 million to $1 billion in the county.
Schnirman said there are a number of ways to deal with loss of tax revenue. One is to cut services and public works, which he believes is a bad idea, given that many people are currently vulnerable and need them. Another is to lobby for federal aid, which he said the county is currently doing and there are bills circulating in Congress that could give some relief. The county could also make minor cuts to a number of areas in order to create a more financially efficient system to save money, he said.
Over the last few years, Schnirman said, the county had been doing well financially and had been able to build up a “rainy day fund.” Before COVID-19, in January and February, the county was on track to surpass 2019 in terms of revenue.
The strong start to the year, along with a state law enacted in June 2019 which allowed tax collection on out-of-state items purchased online softened the blow somewhat for Nassau County, according to Schnirman. That law was one that the Nassau Council of Chambers of Commerce had pushed for.
Schnirman said it was enacted because local chambers complained that buying an item at a local small business was less desirable than purchasing it online because the online sale wasn’t taxed and that the law now “leveled the playing field” somewhat.
New York State Comptroller Thomas DiNapoli issued a similar report Friday, saying that sales tax revenue for local governments dropped 27 percent in the second fiscal quarter this year, from April through June. Losses totaled over $1.2 billion statewide. However, DiNapoli said most regions saw an improvement in June compared with April and May.
“Although there was a glimmer of hope in June, second quarter sales tax figures show how deep the COVID-19 pandemic is cutting into municipal finances,” DiNapoli said in the report.
