Nassau County has come up with a familiar plan to balance its budget in 2021 – a state bailout.
County officials aren’t calling it a bailout. In fact, county Republican legislators are hailing the plan as a great achievement on their part.
“After months of negotiations, members of the Legislative Majority have reached a deal with NIFA, and the Curran administration that will save Nassau taxpayers more than $200 million over the next 15 years,” Republican legislators said in a news release.
For this, the Republican legislators – or “Legislative Majority” as they like to refer to themselves – deserve an Olympic medal for selective use of facts.
The complete picture is that the county’s $3.3 billion budget for 2021 is being balanced on the restructuring of existing Nassau Interim Finance Authority and county debt that will provide more than $400 million in financial relief.
NIFA, you may recall, is the state agency that was created in 2000 to oversee Nassau’s finances after the then “Legislative Majority” went hat in hand to the state Legislature in search of a bailout.
The county, one of the wealthiest in New York, got $100 million in state aid and authority to borrow $400 million more. The only catch was that the country’s finances were placed under NIFA supervision by then Gov. George Pataki, a Republican.
This was a continuation of Nassau County’s habit of following Blanche DuBois in “A Streetcar Named Desire” by depending on the kindness of strangers. In Nassau’s case, the strangers are taxpayers in upstate New York, New York City and the rest of the state.
The plan to refinance the county’s debt for 2021 was developed by Nassau County Executive Laura Curran in October.
NIFA Chairman Adam Barsky said the state authority’s assistance would allow Nassau to “avoid a massive property tax increase and cuts to critical services for those most in need.”
The agreement called for NIFA, whose credit rating allows it to borrow at a lower rate than Nassau County, to refinance the debt and give the county 30 years to pay the money back.
The “Legislative Majority” initially refused to back giving NIFA the authority to refinance the county debt because doing so would extend the life of the control board for decades more.
The Republican legislators finally relented after getting NIFA and Curran to agree to a reduction in the repayment term from 30 years to 15. Hence the claim of saving $200 million over the next 15 years.
In this case, that would be a matter of not having to borrow the money, which will cost Nassau taxpayers over the long term.
Needless to say, the “Legislative Majority” is not taking responsibility for all the money they have cost Nassau County taxpayers by needing to be bailed out in 2000.
As proof of Nassau County voters’ ability to forgive, some legislators who were part of the “Legislative Majority” in 2000 are actually still legislators now.
Notwithstanding the Republicans’ claim of financial prowess, Nassau’s finances remain in dangerous waters.
Even with the refinancing plan, the county could face a $111.2 million deficit in 2021, $137.3 million in 2022, $285.7 million in 2023, and $359.7 million in 2024, according to NIFA’s projections from October.
And neither the “Legislative Majority” nor Democrats appear to be addressing the problem.
“This plan right now isn’t a plan. It lacks any initiatives to address those out years,” said NIFA board member Paul Annuziato in casting the lone vote against the county’s budget. “In short, my conclusion of the county’s budget, it is nothing more than a plan that says let’s delay and hope. Let’s hope sales tax skyrocket much greater than we’ve projected. Let’s hope that the federal government gives us some relief.”
Barsky, who voted to approve the county budget, added that “this remains a short-term extraordinary measure to address the unprecedented impact of the global pandemic. There still exists a longer-term imbalance that must be tackled sooner rather than later.”
NIFA board members are not alone in criticizing the county for failing to address its financial failings.
A group of government experts said the same thing in October at a town hall hosted by Blank Slate Media.
The panel included Michel Imber, who developed a detailed financial plan to cut expenses and raise revenues for the county at NIFA’s behest in 2011.
The plan, according to Imber, was completely ignored by Nassau County.
Another member of the panel, Adam Haber, who served as deputy chief of staff for economic development and government efficiency in the Town of Hempstead, offered a lengthy list of sensible suggestions at the town hall and in a subsequent column in Blank Slate Media.
Thus far, Haber’s suggestions have also fallen on deaf ears.
This is strange since Republicans keep saying they want NIFA’s oversight to end.
Former state Sen. Jack Martins even made early elimination of NIFA’s oversight role a centerpiece of his failed election bid for county executive against Curran.
Martins was the author of one of Nassau’s most imaginative bailouts when as a state senator he succeeded in inserting a provision in legislation that allowed Nassau to “transfer” its rights to operate a video-slot-machine parlor to Aqueduct Racetrack for $43 million over three years.
The state Legislature had granted Nassau and Suffolk counties potentially lucrative video slots as part of the wide-ranging expansion of gambling in 2013.
Nassau-Off-Track Betting Corp. withdrew plans for two potential sites after heavy opposition from residents and local officials complained about traffic and the increased cost of policing.
Chris Wright, a longtime member of NIFA who was also part of Blank Slate Media’s panel, said that notwithstanding Republican legislators’ repeated calls to end state oversight, they have yet to come up with ideas to fix the county’s finances.
This can be explained in a word: politics.
Republican legislators successfully ran for election during the administration of Republican County Executive Edward Mangano based on the county not raising taxes – not even by the 2 percent allowed and implemented by virtually every other government under the state tax cap.
Wright said at the town hall that the county could have balanced its finances if it merely raised spending by the 2 percent every year.
Nassau Democrats have apparently learned the political benefits of not raising taxes, cutting costs or developing new sources of income from their Republican counterparts.
Hence Nassau’s lack of a plan.
If history is any guide, don’t bet on Nassau coming up with a plan any time soon.