Lynbrook, East Rockaway villages join sales-tax lawsuit against Town of Hempstead, Nassau County

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The board of trustees for Lynbrook and East Rockaway each voted last month to join Freeport Mayor Robert Kennedy’s lawsuit alleging the Town of Hempstead and Nassau County do not provide villages with a fair share of sales-tax reimbursement.

They have joined Valley Stream, Rockville Centre and Freeport in the suit, which will be resubmitted after Kennedy compiles a full list of villages that want to sue.

“East Rockaway and other villages, like Lynbrook, Valley Stream and Freeport, will not be purposefully shortchanged in sales tax revenue distribution by the Town of Hempstead and Nassau County,” East Rockaway Mayor Bruno Romano said in a statement. “Our taxpayers deserve better.”

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 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 the funds to them.

“I believe that the Village of Lynbrook deserves their share of the tax revenue that is generated through Lynbrook merchant sales,” Lynbrook Mayor Alan Beach said in a statement.

Kennedy found that East Rockaway generated $1.4 million in sales tax in 2016, but this year it received $27,280 — or $2.78 per resident. 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.

Meanwhile, the town and county received $49.50 for each resident.

Lynbrook and East Rockaway 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 those services, according to Kennedy and Romano.

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 that the town and county use the money they collect from state sales tax reimbursements to balance their budgets. He and Kennedy also 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 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.