Villages suing for $21.5M share of sales tax revenue

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Twenty-eight villages in Nassau County, including Freeport, are suing New York state, the county and the towns of Hempstead, North Hempstead and Oyster Bay, seeking what they believe is their fair share of state sales tax revenues.

“It’s about time that somebody finally put their foot down and this be addressed once and for all,” said Freeport Mayor Robert Kennedy, president of the Nassau County Village Officials Association.

Kennedy announced the suit on Tuesday. Joining Freeport in the legal action are South Shore villages Atlantic Beach, East Rockaway, Hewlett Bay Park, Hewlett Harbor, Hewlett Neck and Lynbrook. Also named in the suit are County Executive Laura Curran, Hempstead Supervisor Laura Gillen, North Hempstead Supervisor Judi Bosworth, Oyster Bay Supervisor Joseph Saladino and Mark Page, Nassau’s deputy county executive for finance.


According to Freeport Village Attorney Howard Colton, the villages have been unable to resolve the sales-tax issue, despite several attempts to negotiate with the county and towns.

The villages did not “want to have to sue the county or the town,” Colton said. “We believe there is a way we could sit down and work this out, if there was a willingness on the part of the county and the town. The [Town of Hempstead], to their credit, has kept the door open, but the county has slammed the door in our faces.”

Kennedy filed a $2.5 million notice of claim against the county and towns on June 1, and amended the claim for a minimum of $20 million on July 31. Then, late last month, he filed the lawsuit, asking for a minimum of $21.5 million for what he described as the unlawful failure to distribute a one-sixth share of the sales tax revenues from the three-quarters percent sales tax authorized by state tax law.

Colton said that Hempstead uses sales tax revenue to balance its budget, and during Tuesday’s news conference, Kennedy said that the town uses the villages’ populations to “boost its allocation of monies” without providing them with services. Towns are allocated a share of sales tax revenue based on population.

Nassau’s 2018 budget included $1.25 million to be disbursed to the county’s 64 villages. Kennedy said, however, that that amount is not enough, given that many villages like Freeport provide their own services, and he continues to insist that Curran has reneged on a 2017 campaign promise to share a greater portion of sales tax revenue with the villages.

Villages “should not be held captive because of the failure of budgets and deficits of other governmental agencies,” Kennedy said.
Colton and the New York City law firm D’Mato and Lynch are representing the villages.

A spokesperson from County Executive Laura Curran's office said they County would not comment ongoing litigation.