Uh-oh. Nassau sales tax craters

Nassau sales tax collections crater in March

The Nassau legislature's bipartisan Office of Budget Review reported today that county sales tax revenues had fallen sharply in March after growing through January and February.

The news was not unexpected because Gov. Andrew Cuomo had essentially shut down the state's economy on March 22 in an effort to stop the spread of the coronvirus.

Economic activity generates sales tax revenues, which make up 40 percent of the county's budget.

But the decline is a bit ear-popping. As indicated in the above chart from the OLBR report, the check received by Nassau for the initial March revenues was down 6.1 percent from the prior year. The next check for March sales tax revenues dropped 23.9 percent from the year before and the last check covering the final collections in March fell 35.3 percent from the previous year's checks.

Because of the early bump in collections, total revenues so far this year are only down by $11.8 million.

But OLBR notes that the economy was totally shut down in April and likely will not reopen in Nassau until the end of May at the earliest.

"Until the economy reopens, the drop in sales tax revenues is expected to persist and there may not be enough time for a recovery to positively impact the FY 20 budget," budget review wrote in a memo to legislators.

The state budget division has warned of a 20 percent drop in sales tax revenues this year.

Nassau's budget review office did not predict the likely total decline but noted, "a 20 percent decrease would impact the budget by approximately $226.5 million, which would be a tall order for the county to overcome."

It notes that County Executive Laura Curran's administration "will need to formulate  plan to address the impending economic crisis."