Nassau County is looking to borrow $300 million to pay off the $360 million in tax refunds owed to residents.
The county would borrow $100 million this year and $200 million in 2019.
Those funds would reduce the money owed, which is accruing interest of rates up to 9 percent each year, according to a Newsday report.
Whether the county would actually be able to borrow the money remains to be seen.
The Nassau Interim Finance Authority, which oversees the county’s finances, has opposed the use of bonding to pay the tax refunds.
Earlier this month, NIFA rejected a request from the county to borrow $23 million to help offset a $45 million judgment won by two Nassau County men who were wrongly imprisoned for 18 years.
But in an interview with Newsday, NIFA Chairman Adam Barsky suggested that the panel might okay the $300 million bond as long as the county had a plan going forward to pay refunds to taxpayers without borrowing.
The lone NIFA director to support the county’s $23 million request to borrow — Howard Weitzman — said that Nassau was facing “an exceptional situation given that the amount in question.”
Before the measure gets to NIFA, it must first receive approval from at least 13 of the 19 Nassau County legislators.
Nassau County Legislator Delia DeRiggi-Whitton (D-Glen Cove) said the county was moving in the right direction on paying off its tax refunds, which have been hanging over Nassau for years.
“First, we finally hired a real assessor, which really makes a difference because we haven’t had a real one in years,” she said. “Second, we’re updating the tax rolls. The third step would be to pay off this backlog.”
In June, the Legislature voted on two measures to address the county’s tax refunds.
One was a measure that created the Nassau County Disputed Assessment Fund, which gives the county the authority to charge a fee on commercial properties that will go toward covering future assessment refunds but will not reduce the county’s backlog.
Another measure, which would have given the county the ability to borrow funds through NIFA, was voted down. The plan would have allowed the county to borrow at a lower rate of interest due to NIFA’s better bond rating but would have spread the payments out until 2041 thus requiring NIFA to continue its oversight of county finances until then.
DeRiggi-Whitton voted in favor of the measure and said it was a missed opportunity at the time. Her opinion has not changed.
“The rates would’ve been less if [we borrowed through NIFA],” she said. “It would only keep NIFA as pertaining to the bonds, not as an oversight committee.”
Presiding Officer Rich Nicolello (R-New Hyde Park) disagreed.
“There would be some saving from borrowing through NIFA but… NIFA costs us over $2 million per year for lawyers and outside consultants,” he said. “So whatever savings there were from borrowing through NIFA would have been outweighed by the cost of its existence.”
He also criticized NIFA and county Democrats for their current willingness to borrow.
“This is something [former Nassau County Executive Ed] Mangano had proposed to do also, and the Democrats and NIFA said no,” he said. “They’ve done a complete 180.”
DeRiggi-Whitton said that the county did not have much of a choice at this point.
“If someone wants to go after the [$360 million] right now, the county would have to pay it,” she said. “It’s a bad situation to be in.”
Reach reporter Luke Torrance by email at [email protected], by phone at 516-307-1045, ext. 214, or follow him on Twitter @LukeATorrance.