Are Nassau County’s finances improving?
Ask incumbent Nassau County Comptroller George Maragos and Democratic challenger Howard Weitzman that question, and you’ll get two very different answers.
Maragos released the county’s initial 2012 year end financial figures last week, after months of waiting as the county tried to ascertain how much of Hurricane Sandy’s cleanup costs it would recoup from the federal government.
And, Maragos said, the numbers are positive – a $41.6 million budgetary surplus, driven, he told Blank Slate Media, by reduced expenses, refinanced debt, and a county employee wage freeze mandated by the Nassau Interim Finance Authority.
“Basically, it’s good news for the county and the taxpayers,” Maragos said, adding that the county also showed a surplus under GAAP accounting standards – a different method of assessing the county’s finances which does not account for one-time revenues, like the sale of county property.
But Weitzman, who served as comptroller during former Nassau County Executive Tom Suozzi’s term until Suozzi’s defeat by Edward Mangano in 2009, disputed claims that the county’s financial situation is looking up, citing a recent downgrade for county bonds by Fitch Ratings.
“That’s a total fiction,” Weitzman said of Maragos’ claims that the county’s finances are improving.
The difference between these assessments lies largely in how each candidate considers the hundreds of millions of dollars in unpaid tax certiorari refunds that the county will have to contend with over the coming years.
According to Weitzman, unfunded liabilities place the county on bad financial footing, and Maragos’ touting of a surplus is deceptive given that the county is still on the hook for tax refunds.
“What he tried to do is to put a positive spin on a deteriorating county financial condition,” Weitzman said. “What that translates to me is if I put the bills in the drawer and don’t look at them, I have a surplus.”
But, Maragos said, it is Weitzman’s criticism that is dishonest, as no municipal accounting standard typically includes such unfunded liabilities when calculating surpluses and deficits.
“It’s unfair, it’s incorrect and it’s false. He should know better, as a supposed CPA,” Maragos said. “”He knowingly elects to mislead.”
Maragos said that the county is showing financial improvement, including lower borrowing and a lower structural gap – the difference between the county’s recurring revenues and recurring expenses – than when Suozzi left office.
But he acknowledged that the Fitch downgrade represents significant concerns over how the county will handle both the unfunded liabilities and court challenges that threaten some of its financial reforms, including a county wage freeze and an effort to end the county’s practice of paying for tax refunds from schools and special districts.
“I think Fitch recognized those, and I think I recognized those as well,” Maragos said. “But we believe that we will step up and address those challenges in a fiscally responsible manner.”
And, despite the bond downgrade – criticisms of which have been a staple of Weitzman and prospective ticket-mate Suozzi’s early campaign against Maragos and Mangano – Maragos said Fitch also recognized that a surplus did exist for 2012.
But for Weitzman, it is those future liabilities that matter, and he says are a serious black mark on the Mangano administration’s handling of the county’s books.
Mangano has long sought a supermajority in the Nassau County Legislature to take out bonds to pay off the tax refunds, but has so far been stymied by Democratic opposition. In late May, he lobbied state lawmakers to allow borrowing without going through the legislature or NIFA.
“The bottom line is, if the county’s financial situation is going so well, why would the county executive be up in Albany getting permission to borrow?” Weitzman said.
