The Nassau Interim Finance Authority voted Friday to move forward with the county’s 2016 budget, on the condition that the county meet quarterly targets next year to fully close an $81 million deficit.
The revised budget County Executive Edward Mangano submitted Nov. 30 is still in “a condition of imbalance,” the state oversight board said, but the quarterly review process gives the county a chance to implement it with accountability from NIFA.
“We believe they have a fighting chance to make this work,” NIFA Chair Jon Kaiman said. “… If it’s not working, we’ll have the ability in real time to make adjustments.”
At the start of each quarter next year, NIFA’s unanimously approved plan says, the county must enumerate how it will make up about $20 million of the deficit. If it fails to meet the benchmark at any point, NIFA would “immediately” cut discretionary spending and deny requests for contracts and new hiring, Kaiman said.
The measure requires Mangano’s office to submit a gap-closing plan for the first and last quarters of 2016 by Jan. 1. County Comptroller George Maragos and leaders in the county Legislature will also be involved in the reviews, Kaiman said.
“With the adopted budget in place, Nassau will continue to provide important services while keeping our county the safest large suburban county in the nation,” Mangano said in a statement.
Today’s vote marks the first time NIFA has rejected a county budget and imposed its own conditions since its inception in 2000.
It comes after a revision process NIFA mandated when it rejected the adopted budget Nov. 19. Then, the board said the county had failed to heed its warnings when the Legislature cut revenue from Mangano’s original budget and upheld its removal of a $12 million, 1.2-percent property tax hike in a first-ever veto override.
County officials expected the review scheme after Mangano submitted Monday a package of revisions expected to close the gap by $35.8 million, about half the $81 million deficit risk NIFA identified.
The changes included $16 million in revenue from fee increases the county Legislature approved Nov. 23, some of which will increase the cost of filing mortgage and land-use records by hundreds of dollars.
Mangano also made $19.8 million in spending cuts by delaying $12.8 million in debt service payments until February, reducing fringe benefits by $3 million due to reductions in county staff, and reducing contract spending for parks, IT, human services and other services by $4 million.
NIFA still sees risks in several budget items, including $10.7 million in sales taxes, $9.2 million in police overtime pay and $20 million from a proposed video casino. In a letter to NIFA Monday, Mangano said the latter figure will likely be lower because of “implementation delays” on the casino project.
But the review plan gives the county a chance to prove its projections are right and make adjustments if they aren’t, Kaiman said.
“We’re basically holding them to task that their numbers are correct, and if not, then we have to oversee them and make the appropriate adjustments,” NIFA board member Adam Haber said.
Minority Leader Kevan Abrahams (D-Hempstead), whose party sought to prevent major cuts to county youth services during the budget revision process, said he thinks the quarterly reviews are “essential.”
“I think it’s fair. It allows us to keep the programs that we wanted to continue to protect,” he said.
Neither Presiding Officer Norma Gonsalves (R-East Meadow) nor Deputy Presiding Officer and finance committee Chair Richard Nicolello (R-New Hyde Park) could be immediately reached for comment.
If the quarterly targets aren’t met, though, youth services and other programs NIFA deems non-essential could see those cuts under the board’s austerity measures. If they’re implemented, Kaiman said they could last indefinitely.
Ultimately, he said, it’s up to the county’s lawmakers to fund county services, not NIFA.
“All the letters that we got for youth board and other such things, those letters are meant for those responsible, and that is the Nassau County government,” Kaiman said. “And if it comes up short, then those responsible should be prepared to take responsibility.”
While NIFA’s move reiterates its demand for the county to end the practice of borrowing for operating expenses, it also voted 5-1 today to allow $23.3 million in borrowing for termination pay out of $33.5 million budgeted for 2015. The county will pull the other $10.2 million from its reserve fund.
Board member Chris Wright was the sole no vote on the measure; and board member Paul Annunziato was absent.
