Maragos: Nassau ended 2011 with $51M gap

Nassau County Comptroller George Maragos is calling for

Nassau County Comptroller George Maragos is calling for an investigation into whether the county may have lost money due to the recent LIBOR scandal roiling Wall Street. (June 22, 2012) (Credit: Howard Schnapp)

Nassau Comptroller George Maragos will announce Friday that the county ended 2011 with a $51-million deficit and is expected to warn that another multimillion-dollar hole is possible this year unless steps are taken to cut costs or increase revenues.

Maragos was to announce the deficit numbers at a morning news conference in Mineola even though outside auditors are not expected to officially close the books on 2011 until the end of this month -- 30 days later than normal.

The $51-million hole is not a surprise. Maragos warned in March that the county could face a year-end deficit of $43 million if the county legislature did not approve borrowing to pay property tax refunds from last year. Officials last month transferred $43 million from this year's $92-million reserve fund to cover the gap as County Executive Edward Mangano has continued unsuccessfully to convince Nassau Democratic lawmakers to provide the votes needed to borrow.

Then, the legislature's independent budget review office late last month found sewer reimbursements had been double-counted, boosting last year's deficit to more than $50 million.

On Thursday, Mangano laid the blame for the deficit on the county's nine Democratic lawmakers.

"The Democrats created Nassau's fiscal mess and have refused to provide the votes necessary to assist the county in fiscal recovery since losing their power over the legislature," Mangano said in a statement. "I am certain every resident is nauseated at the Democrats' thinly-veiled attempt to create fiscal chaos for their own political advantage."

But minority leader Kevan Abrahams (D-Freeport) said, "The county executive will blame everybody but himself . . . The fact is he has mismanaged this budget since he took office. It's very clear that every initiative he comes up with doesn't save the money he says it's going to save."

Although sales tax collections in Nassau this year are running a robust 5.9 percent over last year, Maragos is expected to say increased sales tax revenues will not prevent the county from ending this year in a deficit. The county budgeted a 3.2 percent increase in sales tax collections this year.

In Suffolk, sales taxes are up 4.9 percent for the year to date. Former Suffolk County Executive Steve Levy budgeted sales tax growth of 3.95 percent this year; in March, a special panel appointed by County Executive Steve Bellone forecast a 2.5 percent growth rate in projecting a $530-million budget shortfall through 2013.

Nassau's budget office in May predicted an $11.8-million surplus this year, but that assumes Mangano will make $22 million in unspecified labor cuts in addition to other spending reductions.

Under accounting principles used by the county's financial control board, the Nassau Interim Finance Authority, Nassau's 2011 deficit would exceed $170 million. NIFA rules do not let the county use borrowed money or one-time revenues to balance its budget. Because of the county's strained finances, NIFA does not expect Nassau's budget to be balanced according to approved accounting principles until 2015.

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