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Posted on: January 12, 2015

[ARCHIVED] 01/12/15 - Maragos: Sales Tax Projected $72M Lower For 2014

Nassau County Comptroller George Maragos reported that the last sales tax reconciliation check received from New York State was $34.7 million, or 7.4% higher than in 2013. However, year over year the County will end 2014 with a projected $71.7 million or 6.2% less than budgeted.
The decline is very significant but not as severe as earlier feared due to a leveling off of local economic activity in the 3rd and 4th quarters of 2014 compared to the 9.89% steep declines in the first two quarters of the year. Notwithstanding the higher sales tax check the County just received, the second half of 2014 was still 0.1% lower compared to the year earlier. This is the first year since 2009 that year-over-year sales tax revenues will actually decline and the first time during a period of national and regional economic expansion. (See Table Below)“The decline in the first half of the year can reasonably be attributed to the end of the spending boost for Sandy recovery,” Comptroller Maragos said. “Stripping out the Sandy boost however, the first two quarters represent almost no growth from the first half of 2012, two years earlier, and only 2% full year growth over 2012. Normally, the County would have expected to be 7% higher in 2014 than 2012 assuming the historic sales tax average growth of 3.5% annually during economic expansion. Flat consumer income growth and shifts to online purchasing continues to look like the new norm causing uncertainty in future sales tax growth that will require more conservative budgeting.”
Sales tax is the County’s largest source of revenue, accounting for approximately 40% of budgeted revenues.

Sales Tax Revenues
 Sales Tax Revenues
% Sales Tax Growth From Prior Year
Metro NY GDP Growth
 2010  $0.992  6.7%  0.8%
 2011  $1.027  3.6%  3.6%
 2012  $1.070  4.2%  2.6%
 2013  $1.138  6.3%  4.5%
 2014  $1.090  - 4.2%

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