Freeport Mayor Robert Kennedy filed a $2.5 million notice of claim on June 1 against the Town of Hempstead and Nassau County to win back what he calls a “fair share” of state sales-tax reimbursements for the village, but he has not yet received a response. Now other villages, including East Rockaway and Lynbrook, might join in legal action seeking a greater share of sales taxes.
Villages annually generate millions of dollars in sales-tax revenue for the state, which then returns a portion of that money to counties and towns. According to Kennedy, Hempstead and Nassau are supposed to share the money with villages, but they distribute only a small fraction of it to them.
“Maybe [the town and county will] come to the table and resolve this before we start spending money on litigation,” Kennedy said. “Litigation is going to cost everyone money. If I have to litigate, I will, although I prefer to negotiate some type of settlement.”
Kennedy, who is the former Nassau County Village Officials Association president, said the county’s more than 60 villages could join in a class-action lawsuit against their local towns and the county. To join in the suit, the East Rockaway and Lynbrook boards would have to vote to do so, and then Freeport would submit a revised notice of claim. Then villages could follow with a suit, Freeport Village Attorney Howard Colton said.
“Since we’ve filed the notice of claim, we’ve had other villages that have now come to us and want to join in the action,” Colton said.
Filing of the claim comes almost a year after Lynbrook Mayor Alan Beach and East Rockaway Mayor Bruno Romano signed a petition requesting that the distribution of state sales tax be increased to villages.
“Nassau County is the only county in New York state that does not share a portion of the sales tax it receives from New York state [with] its 64 villages,” Lynbrook Village Clerk John Giordano said in a statement.
Kennedy crunched the numbers for each village in Hempstead. According to his calculations, Lynbrook generated more than $2.8 million in state sales tax in 2016, but this year the village has received $53,979 in reimbursements from the town and county — or $2.76 for every village resident.
East Rockaway generated $1.4 million in sales tax in 2016, but this year it received $27,280 — or $2.78 per resident.
Meanwhile, the town and county receive $49.50 for each resident.
Lynbrook and East Rockaway, like Freeport, are self-sufficient villages with their own sanitation and public works departments, so they do not use town services, but they do need a greater share of sales-tax revenue to maintain their services, according to Kennedy.
The reimbursements could help fund village departments, East Rockaway Mayor Bruno Romano said. “We could definitely use the money to offset some of the costs we have in the Department of Public Works,” he said, adding that Kennedy is working to “get the money that is due to us.”
According to Colton, the county “washes its hands” by saying the town is responsible for determining to whom returned sales tax revenues should be distributed.
Colton said the town uses the money to balance its budget. Kennedy and Colton said they have attempted to negotiate a resolution to the issue, but have received little or no direct response from Town Supervisor Laura Gillen, a Democrat from Rockville Centre who was elected last November.
The Herald has not spoken directly with Gillen. In an email, a town spokesman stated, “The town has been discussing the village’s interpretation of the law and looks forward to resolving the matter amicably.”
Kennedy has also contacted County Executive Laura Curran, but the matter remains unresolved after their conversations. “County Executive Curran promised to share a fair portion of sales tax revenues to Nassau County villages before her election,” Kennedy said, “but now has reneged.”
“The town is financially benefiting from [the] villages,” Colton said, “and the town’s response is, ‘There’s nothing in the statute that says we cannot do it.’”
Curran declined to comment for this story, but expressed her support for giving villages larger sales-tax revenue at a debate last year. In February, however, she revised her position at a meeting of the Nassau County Village Officials Association, saying the county needed to “tighten its belt.”
In the late 1990s, Colton said, then-County Executive Thomas Gulotta, a Republican from North Merrick, distributed a fair share of sales tax revenues to the villages. William Glacken, who became Freeport’s mayor in 1997, later negotiated with Thomas Suozzi, a Democrat from Glen Cove who became county executive in 2002, to provide an even greater share of sales-tax revenues to villages, to be spread out over five years. The revenue-sharing agreement ended in 2009 with the election of Ed Mangano, a Republican from Bethpage.