Mangano budget plan: Experts say it's less risky
Nassau County Executive Edward Mangano's proposed 2013 budget relies on fewer risky revenue sources than his previous budget offerings, fiscal and political experts said.
But others raised concerns about a plan for a private investor to purchase $20 million in county debt as well as sales tax projections in the 2012 budget.
"The county executive has proposed a conservative, no-frills budget with the least amount of risk than at any point in the prior five years," said Nassau Comptroller George Maragos.
However, Maragos also has called on Mangano to drop a plan to allow a private investor to buy $20 million in tax refund debt, saying the deal would jeopardize the county's credit rating by adding millions of dollars of debt to its books.
And Paul Sabatino, a chief deputy under former Suffolk County Executive Steve Levy, cautioned about Mangano's budget, "The needle has turned slightly in the direction of more prudence. But not dramatically so."
In a statement, Mangano said, "The fiscally responsible choices I have made to cut wasteful spending have resulted in recurring savings for the county."
Unlike his 2012 spending plan. Mangano's $2.79 billion budget, which he introduced last week, does not count on new revenue sources that require the approval of the Nassau Interim Finance Authority, a state monitoring board that controls the county's finances.
"It seems like the county executive is going for solid base hits and is not swinging for the fences," said Lawrence Levy, executive dean of the National Center for Suburban Studies at Hofstra University. "It's a reflection that many of his biggest ideas have been shot down or found not to be doable."
Mangano's 2012 budget included several revenue-generating proposals and savings initiatives that never were enacted.
It called for Nassau workers to contribute 25 percent to their health care, the elimination of minimum manning rules at police precincts, the closure of county police precincts and museums, and layoffs of more than 1,000 workers.
In the end, Mangano laid off about 300 county employees, and enacted a plan to downgrade four of Nassau's eight police precincts into community policing centers, saving a combined $30 million per year, officials said.
One question mark in the 2013 budget is the $18 million allocated to pay property tax refund judgments. In last year's plan, Mangano at NIFA's urging budgeted $75 million for the judgments. But he spent only a fraction of the money because legislative Democrats blocked a plan to borrow to pay for the refunds.
Mangano proposed last week to allow a private investor to purchase $20 million in residential tax refund debt, reducing the need to borrow for refunds. The plan would not require legislative approval, Mangano said. The investor would pay off the taxpayers, and the county would pay back the investor over seven years at 5.95 percent interest.
Democrats contend the plan must come before the legislature and NIFA. They are considering filing a lawsuit.
And Maragos said he was not comfortable with the deal. He said it would be more fiscally prudent for Nassau to ask a judge to allow the county to reach an identical payment plan and interest rate with the homeowners directly. County Attorney John Ciampoli has said he plans to move forward with the deal.
Maragos also said Mangano may have overstated sales tax assumptions. The 2013 budget assumes a 3.6 percent sales tax increase while Maragos predicts a 3 percent rise.
NIFA officials have not commented about the new spending plan. Maragos and the independent Office of Legislative Budget Review each plan to release analyses of the 2013 budget next week.