Rockville Centre joins Freeport's lawsuit against town, county to collect villages' ‘fair share’ of sales tax

Rockville Centre Mayor Francis X. Murray

Rockville Centre’s Board of Trustees on July 19 voted to join the Village of Freeport’s claims and litigation against the state, the Town of Hempstead and Nassau County to collect the village’s “fair share” of sales tax revenue.

According to the lawsuit, 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 Freeport Mayor Robert Kennedy, who previously served as the Nassau County Village Officials Association president, Hempstead and Nassau are legally required to share the money with cities and towns and have traditionally shared with villages as well, but they distribute only a small fraction of it to them.

Freeport’s June 1 filing claims that it is due $2.5 million in tax revenue under state law. They’re not alone, as 62 of Nassau County’s 64 villages, including Rockville Centre, had signed a petition asking for a change in the amount of money distributed to the municipalities.

The unanimous decision by Rockville Centre’s trustees reaffirmed their support for the push, on the condition that the village would incur no cost for litigation, according to minutes from the July 19 meeting. The vote came three days after the village of Valley Stream joined the effort.

Despite contributing more than $3.5 million in sales taxes in 2016, in 2018, Rockville Centre received back 66,749 in reimbursements from the town and none in 2017. The village receives about $2.72 in state sales-tax revenue for every resident of the village. Meanwhile, the county and town get approximately $49.50.

“Each year millions of dollars in sales tax are collected by merchants in our village,” Rockville Centre Mayor Francis X. Murray said in a statement. “Be it car sales through our many dealerships or restaurants and other merchants, the sales tax dollars never come back to Rockville Centre to help keep property taxes down and provide necessary services. I believe this is unfair and I am happy to join my fellow mayors in trying to remedy this situation.”

Rockville Centre, like Freeport, is an incorporated village, with its own sanitation and public works departments. Accordingly, they need a greater share of sales-tax revenues to maintain their services, Kennedy said.

According to Freeport Village Attorney Howard Colton, however, 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. But a spokesman for the town said in an email that “the town has been discussing Freeport’s interpretation of the law and looks forward to resolving the matter amicably.” He added that the town has great respect for Murray, who he said Gillen has successfully worked with in the past on a variety of issues.

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.