Valley Stream trustees sign on to sales tax lawsuit

Village of Valley Stream trustees voted on July 16 to join Freeport Mayor Robert Kennedy’s lawsuit alleging that the Town of Hempstead and Nassau County do not provide villages with a fair share of state sales tax reimbursements.

“The villages should have their fair share,” Mayor Ed Fare said in a statement. “We have the businesses, and we support them with lights and traffic and road repair and such, we should get more of a portion of sales tax revenue returned to us.”

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 it to them.

He found that Valley Stream contributed more than $5.4 million in sales taxes in 2016, but in 2018, the village only received $104,225 in reimbursements from the town and none in 2017. Valley Stream receives $2.76 in state sales-tax revenue for every resident of the village. Meanwhile, the county and town get approximately $49.50.

To make matters worse, Valley Stream, like Freeport, is an incorporated village, with its own sanitation and public works departments. Such receive no services from the Town, except for police protection. 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 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.