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Valley Stream to receive state aid

Payments were in question after state budget error

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The Village of Valley Stream appears set to receive its share of state aid after months of uncertainty over whether the payments would come through.

Villages and towns across Nassau County will receive roughly $8 million in Aid and Incentives to Municipalities, or AIM, funds that they were due to be paid by the state in September. Valley Stream is owed nearly $560,000 for the 2020 fiscal year, according to the state comptroller’s office.

The funds’ disbursement had been in question after a state budgetary oversight in which it was discovered that there was no legal mechanism for New York to provide the funds to towns and villages in counties whose finances are overseen by control boards. Nassau is one of two in the state with a financial control board; the other is in Erie County.

On Nov. 13, the County Legislature authorized an emergency agreement between County Executive Laura Curran and the county’s control board — the Nassau County Interim Finance Authority — to allow NIFA to release revenue collected from online sales tax to the state comptroller’s office, which is responsible, in turn, for distributing the money to towns and qualifying villages under the state’s 2019 AIM program, according to a news release from Curran’s office.

“We stepped up to address this problem because our towns and villages rely on this funding to balance their budgets and to continue delivering important services to County residents,” Curran said in a statement. “Nassau County has taken action, and I’m hopeful our quick response enables the State Comptroller to make timely 2019 AIM-related payments as required by Dec. 15, 2019.”

Without the money, Valley Stream would have been forced to reduce overall payroll in departments, avoid new hires or use roughly $250,000 of contingency funds within the budget, Michael Fox, the village treasurer said. The village’s AIM funds have traditionally gone to street repair, sanitation, library needs, Fire Department salaries and payroll, and other public necessities, he added. 

“AIM funding has been reliable in the past,” he said, “but that doesn’t mean we’ll [always] get it.”

The problem stemmed from a switch in February to online sales tax as the revenue source for state AIM funds, according to previous Herald reporting.

After cutting state funding in his initial proposed 2019-20 budget for towns and villages in which state aid made up less than 2 percent of their revenue, Gov. Andrew Cuomo announced that AIM funds would be raised through online sales tax. In Valley Stream, AIM funding makes up 1.3 percent of the village’s revenue for its current $41 million budget.

“The comptroller’s office has been has been working with the state [Division of the Budget] and the impacted local governments to resolve the issues that arose when the AIM program was changed in conjunction with the 2019-20 state budget,” said Tania Lopez, deputy spokeswoman for the state comptroller’s office. “As of right now, the Village of Valley Stream is currently scheduled to receive $558,334 as an AIM-related payment in May 2020. Payment timing is determined, in part, by each recipient’s fiscal year end.”

Because of the powers vested in NIFA, revenue from online sales tax collected in Nassau County could not be paid to the comptroller’s office, which is responsible for distributing AIM funds to the county’s towns and villages. As part of Curran’s agreement with NIFA, it will now be allowed to return to the state the revenue needed to make the AIM payments to the towns and villages, with NIFA providing the remainder to the county. Because Nassau has no legal right to online sales-tax revenue, according to the release, the agreement is cost-neutral to the county.

Melissa Koenig and Peter Belfiore contributed to this story.