Nassau County Comptroller George Maragos said on Monday that the county ended 2016 with a $39 million surplus but noted that by the county fiscal control board’s standards, it had a $73 million deficit.
Maragos called the county’s surplus a “win” for the county and taxpayers because expenses were “somewhat controlled.”
“While on the surface, the county financials appear to have improved, the administration continued to rely on unnecessary borrowing,” Maragos said. “Nevertheless, the fund balance will increase, the structural gap will narrow and the NIFA presentation results will fall below guidelines.”
The surplus is primarily due to the $105.8 million the county borrowed, which was approved by the county Legislature and the Nassau County Interim Finance Authority, the county’s fiscal control board, Maragos said.
Adam Barsky, NIFA chairman, said using borrowed money for operating expenses “creates GAAP deficits that keep the county in a control period and is one of the leading causes for the county’s county stress.”
“Despite Comptroller Maragos’ announcement, the facts remain that Nassau County has a $72.9 million deficit based on Generally Accepted Accounting Principals (GAAP) and New York State law,” Barsky said. “NIFA remains steadfast in requiring the County to eliminate these practices and the deficit to end the state-mandated control period.”
Maragos switched parties last year and is running for county executive as a Democrat.
County Legislator Laura Curran (D-Baldwin), who is also running for county executive, condemned Maragos’ announcement.
“Just like Ed Mangano, George Maragos must really think taxpayers are dumb,” Curran said in a statement, referring to the county executive. “If he borrowed $100 to pay a $20 bill, he’d expect us to believe he earned an $80 ‘surplus.’ And that’s what he’s doing now. Borrowed money — which taxpayers will be paying back for years — is not ‘a surplus.’ We need to fix the mess in Mineola, and that starts with telling taxpayers the truth.”
Maragos said the $274 million in county reserve funds and other funds should be used.
“I urge the county Legislature to use the growing fund balance to restore bus services, increase funding for youth services, reduce fees and lower property taxes, especially for seniors and veterans,” Maragos said.
Eric Naughton, deputy county executive of finance, said in a statement that NIFA has said the fund balance cannot be used to pay for these services.
“While the administration may agree with some of the comptroller’s desires, NIFA has made it very clear that the county cannot use fund balance to pay for recurring expenses such as restoring bus services or increasing funding for youth services,” Naughton said. “What shouldn’t be lost is that the comptroller is showing that we have dramatically improved the structural gap. In 2014, the comptroller stated that the structural gap was $240.5 million and now it is only $45.5 million.”
Naughton said the budget for 2018 will have no structural gap and no borrowing.
Maragos said recurring revenues were lower than budgeted by $82 million and recurring expenses were lower by $36 million.
The resulting $45.8 million negative variance, Maragos said, was reduced by more than $70 million in one-shot revenue items, $22 million in one-shot lower expense items and $62 million in operating expenses paid with borrowing, resulted in a potential $111.6 million surplus.
Assemblyman Chuck Lavine, who is also running for county executive, said, “We have a duty as public servants to tell the truth even when it’s not popular,” adding, “Nassau residents deserve better.”
Reach reporter Stephen Romano by e-mail at firstname.lastname@example.org, by phone at 516.307.1045 x214. Also follow us on Twitter @stephenromano13 and Facebook at facebook.com/theislandnow.