The day of reckoning is upon us. On Sept.15, lame duck County Executive Ed Mangano is bound by law to present to the Nassau Interim Finance Authority, a budget for fiscal 2018 and a four-year financial plan covering 2018-2021.
To make it easier for the hapless county executive to face fiscal realities, and to help him achieve a budget balanced according to Generally Accepted Accounting Principles (GAAP), NIFA hired Capital Market Advisors to produce a “Strategic Reduction Analysis” that identifies doable cost-cutting measures in targeted county departments.
The report concentrated on “government operations (administrative and financially), public safety, correctional, health, social and human services, public works and recreational.”
CMA came up with 38 cost reduction recommendations at the county level totaling $87.7 million — more than enough to eliminate the county’s projected operating deficit for 2018, or at least to reduce it to a level below the 1 percent trigger which necessitates a control period by NIFA.
Here are some of big ticket reduction initiatives:
• Hiring freeze — $15 million in savings
• Privatize ambulance services — $15.5 million in savings
• Elimination of crossing guards — $14.5 million in savings
• Transfer or elimination of park maintenance — $5.6 million in savings
• Elimination of youth services — $5.5 million in savings
• Closure of Marine Bureau – $3.9 million in savings
• Legislative staff reduction – $2.7 million in savings
• Elimination of mounted police — $585 thousand in savings
Do I have high hopes that Mangano will take these reductions seriously?
Will he, unfettered by the proclivities of a candidate seeking to curry favor, finally present to NIFA his first and most responsible budget proposal in eight years? No.
Here’s why I’m doubtful:
First and foremost, for the past eight years Mangano has been living under the delusion that he has balanced his annual budgets.
Year after year, he failed to grasp the basic rule of Municipal Accounting 101, which is that borrowed money does not count as operating budget revenue under GAAP.
Hence, taxpayers should be prepared to hear Mangano make an absurd boast on Dec. 31, his last day in office, that the 2017 fiscal year ended with a balanced budget.
Next, Mangano ignored a 2011 report commissioned by NIFA similar to CMA’s study, the 300-page “Fiscal Sustainability Initiative” prepared by Grant Thornton LLP.
Because Mangano didn’t possess the political guts to order the cuts suggested by Grant Thornton, I am not inclined to believe he will have a Road to Damascus conversion in the waning months of his administration and include CMA’s most significant recommendations in his final budget.
Finally, I don’t believe the budget process is on Mangano’s front burner. Remember, the indicted county executive’s criminal trial begins shortly after he leaves office.
My guess is that’s foremost on his mind and he’ll be spending ample time, and leftover campaign funds, with his lawyers this fall preparing his defense.
Nevertheless, if Mangano is true to form and proposes another makeshift budget and fiscal plan, NIFA has an incredible opportunity to finally fix the county’s finances.
Under the NIFA statute, after reviewing the Mangano plan, NIFA can send it back demanding more cuts or revenue enhancements.
But if NIFA is not satisfied with the revised budget that must receive legislative approval by Oct. 31, NIFA can order the county to formulate a new plan.
If the county fails to do so, NIFA can save the day by imposing a budget of its own.
The timing is perfect for NIFA to exercise the ultimate power granted in the state law that created the authority.
NIFA would not only be doing a great service to long-suffering taxpayers by truly putting the County on the road to fiscal sanity, it would also be doing a great favor for the new County Executive who will be sworn in to office on January 1, 2018.
NIFA can do all the heavy lifting and the new county executive can enter office with a clean slate.
It’s time for NIFA to forsake its previous reliance on the word of the disgraced Ed Mangano and to fill the void itself and act to fix the Mangano mess.
And, if I were a candidate for county executive this year, I’d be cheering NIFA on.