July 16, 2012 / 12:06 PM / 5 years ago

NYC and NY counties see slower Q2 growth in sales tax revenue

* New York City's Q2 sales tax revenue growth down by half

* Rockland Co. sees surprising decline in sales tax revenue

* Westchester Co. sales tax collections up slightly

By Joan Gralla

July 16 (Reuters) - Sales tax revenue slowed in some New York cities and counties in the second quarter, underscoring the still uneven and uncertain economic recovery.

New York City's sales tax collections grew 2.79 percent in the second quarter from a year ago, according to the New York State Department of Taxation and Finance.

That is less than half the 7.7 percent rise seen in the 2011 second quarter versus the 2010 second quarter. The latest result looks particularly dismal when compared with the 24.73 percent increase seen in the second quarter of 2010 over the same 2009 quarter.

But 2010 sales tax revenues were boosted by an increase in the rate - to 4.5 percent from 4.0 percent - and the elimination of an exemption on sales of clothing and footwear that cost less than $110. Those changes began on August 1, 2009.

"Sales taxes have tracked the economy, which has been volatile," said Howard Cure, director of municipal research for Evercore Wealth Management, LLC.

A number of localities and counties in the state also saw less vigorous increases in sale tax revenue during the second quarter.

A few even lost ground, including Rockland County, which lies just north of New York City.

Rockland's sales tax revenue slipped 0.81 percent in 2012's second quarter from the year-ago period. The 2011 second quarter gain, when compared with the equivalent period in 2010, was 2.02 percent. The 2010 second quarter gain versus the year-ago was slim indeed: just 0.22 percent.

"We're kind of shocked when we look at these numbers and we see the growth in all the surrounding counties," said Stephen DeGroat, Rockland's Commissioner of Finance and Budget.

Westchester County, another wealthy hub that also sends commuters south to Manhattan, has seen next to no growth in its sales tax revenue. Collections rose 0.19 percent in the second quarter of 2012 versus a year ago. The equivalent 2011 gain was 0.37 percent. But the 2010 increase in the second quarter over the 2009 second quarter was a more robust 11.60 percent.

"The sales tax revenue figures reflect the sluggish, inconsistent nature of the overall economy," Senior Advisor Ned McCormack said by email. "Despite the recent dip, the county still hopes to hit its budget target of 3 percent growth in sales tax collections for 2012."

Nassau County, which lies just east of New York City, chalked up a 4.36 percent gain in second quarter sales tax collections versus a year-ago.

"These strong sales tax receipts indicate a growing economy," said Brian Nevin, a spokesman for Republican County Executive Edward Mangano.

The latest result was an improvement over the 1.89 percent decline in the second quarter of 2011 versus a year earlier. But once again, the 2010 second quarter result, when compared with the second quarter of 2009, was strikingly stronger: up 10.47 percent.

Suffolk County, located on the eastern half of Long Island, collected 3.54 percent more in sales taxes in the 2012 second quarter than a year earlier. Still, that was off the 4.95 percent rise seen in the 2011 second quarter versus the year-ago, though it was about even with the 4.92 percent gain seen in the 2010 second quarter over the 2009 second quarter.

"We are hopeful that we will meet the budgeted sales tax revenue projection for 2012 and not add to Suffolk County's deficit," Vanessa Baird-Streeter, a spokeswoman for Democratic County Executive Steve Bellone, said by email.

Michael Pitcher, a spokesman for the Democratic presiding officer of the legislature, William Lindsay, noted summer sales tax collections often spike due to the county's popular beach resorts, which include the Hamptons.

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