Villages deserve greater share of state sales taxes


Tens of millions of dollars in state sales taxes are generated in Nassau County’s 64 villages each year. The state keeps part of the money, and sends part of it to the county, the cities and the towns. Once upon a time, Nassau County and towns such as Hempstead gave villages a fair portion of the money. That’s no longer true in many cases, and that’s just not right.

Certain towns stopped the practice of sharing sales tax revenue with villages in the early 2000s. Now Village of Freeport Mayor Robert Kennedy is fighting to have a greater share of sales taxes returned not only to his village, but also to villages throughout the county. Kennedy, the outgoing president of the Nassau County Village Officials Association, is leading the charge to get villages their fair share of the sales-tax pie.

He’s right to be doing so.

Many villages like Freeport provide their own services for residents. Freeport has its own sanitation, public works and electric departments, among others. It could use sales tax dollars to fund these vital services and balance its books, as it once did.

Freeport falls under the Town of Hempstead’s jurisdiction. Hempstead decided to keep a bigger share of sales taxes before Supervisor Laura Gillen took office in January, so this isn’t her policy, but it is hers to fix. We hope and trust that officials in Nassau’s three towns — Hempstead, North Hempstead and Oyster Bay — will negotiate in good faith to provide villages more sales tax revenue.

According to Kennedy, Hempstead is using Freeport’s and other villages’ share of state sales taxes to balance its own budget. In fairness, not all villages are proudly self-sufficient, like Freeport. A number of them rely on Hempstead and other towns for their services. In such cases, the towns are right to keep a greater portion of sales taxes. In cases such as Freeport, however, it’s just plain wrong.

With a population of 43,000, Freeport is the second-largest village in New York state. Each year it generates roughly $15.8 million in state sales taxes. The state collects the money, and then sends about $6.2 million to Nassau and Hempstead. Freeport annually receives around $119,000 — a mere fraction of what Kennedy contends the village is entitled to. It receives $2.64 in state sales tax revenue for every resident of the village, while the county and town get $49.50.

Freeport is not alone. The county and town receive more than $3.5 million in sales tax revenue generated by the Village of Rockville Centre, which in turn receives $66,749. In the case of Lynbrook, the county and town receive $2.8 million, but the village receives just under $54,000. And the list goes on. While the numbers vary from village to village, the general result is the same. Many villages simply aren’t getting what they deserve.

On June 1, Kennedy filed a $2.5 million notice of claim against Nassau and Hempstead, seeking a greater share of state sales taxes. If nothing is resolved through negotiations with county and town officials, he said, he is considering suing.

Villages across the county could join in a class-action lawsuit if the status quo doesn’t change. Sixty-one of 64 villages have already signed a letter demanding change. This isn’t the first time that village officials have attempted to resolve this issue. Last year, the mayors of several villages signed a petition to request sales tax reimbursements from Hempstead.

Kennedy recently said that he hasn’t received an answer on the issue from Gillen. County Executive Laura Curran, who also took office in January, had discussed giving villages a greater portion of tax revenues before being elected, but has since softened her stance. The county’s current fiscal crisis, a holdover from the previous administration, might have changed her mind.

Given the financial crises that Nassau has faced for years, we don’t necessarily expect that county officials will be quick to embrace Kennedy’s call. Hempstead has traditionally been in better fiscal shape than the county, but it, too, has had to implement belt-tightening measures to balance its books in recent years, so we presume town officials will be reluctant to say yes to Kennedy’s request.

Still, what’s right is right, and what’s fair is fair. And it’s only right and fair that villages with their own services receive a greater share of state sales tax revenue.