Election season: When a surplus is not a surplus
Don't believe the hype.
Nassau's newest iteration of a budget surplus -- once again -- isn't a true surplus at all.
It's not that a report released by Comptroller George Maragos last week was devoid of insight. It noted, for example, that Nassau County had seen a sales tax revenue increase.
That's significant for the county -- would be for Suffolk, as well -- because the region's politics of we-won't-raise-your-property-taxes has left both counties relying heavily on sales tax as revenue.
Will Nassau's reported increase in sales tax revenue continue and become a trend? Is it a blip? The answer, like the weather, can be unpredictable.
Which is one reason why using such increases to tout surpluses isn't a grand idea.
In the report, Maragos projected that the county would end the year with a $5.6 million cash surplus.
The word cash is key here; because, as Maragos also acknowledged, he expects the Nassau Interim Finance Authority to project something entirely different, which is that the county probably will finish the year $119.6 million in the red.
In other words, with no surplus at all. What's happening?
It's election season, when even a seed of good news grows to giant proportions. But there's a stark difference between good news and Nassau pulling itself out of fiscal distress.
With all that trumpeting over the past few years about surplus -- after surplus, after surplus -- residents couldn't be faulted for believing that Nassau was readying for good times.
Every time Maragos, a Republican, said there was a surplus somebody -- usually Democrats and members of NIFA -- would rise up to say no.
The back and forth had become like a good tennis match.
It was enough to foster a bad case of whiplash.
This time, however, Maragos apparently decided to beat NIFA to the draw by acknowledging flat out that the control board does its math differently -- using generally accepted accounting principles.
What would a real surplus look like? Residents, believe it or not, never have to know. The easiest thing, instead, would be to look to Nassau's financial control board.
Yes, NIFA let former County Executive Thomas Suozzi off the hook during his last term -- allowing him to count borrowed money as revenue, which goes against those accounting principles.
Had they been as tough on Suozzi as on County Executive Edward Mangano, Nassau would have been reporting to a full-blown control board years ago.
These days, NIFA won't let Mangano count borrowed money as revenue -- which is why Maragos can come up with a small cash surplus while NIFA probably would come up with another big deficit.
The difference comes because NIFA discounts one-shot and other nonrecurring revenue -- such as borrowing.
The control board also has repeatedly asked Mangano to trim the county's labor costs as a way of cutting the cost of government.
According to Wall Street bonding agencies, however, the county has managed to implement some of NIFA's suggestions -- although not enough to keep Nassau's bond rating from twice being knocked down.
But I digress.
The question for residents remains: How will we know when Nassau's surpluses are real? The answer?
It's pretty simple:
When there's no more need for a control board.