Maragos touts $41.6M Nassau surplus; critic says it's 'fiction'
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Nassau Comptroller George Maragos said Wednesday that the county likely ended last year with a $41.6 million surplus, although his election opponent and other critics questioned his numbers.
Maragos, a Republican running for re-election, said the predicted surplus comes primarily from lower borrowing costs and increased sales tax collections. He credited better financial management by fellow Republican County Executive Edward Mangano, contending that "county finances have improved year over year in every respect since 2009."
But Maragos' Democratic opponent, former county comptroller Howard Weitzman, said Nassau officials have masked Nassau's true financial condition through misstatements and gimmicks, such as not paying property tax refunds despite a growing backlog estimated by Maragos at $335 million.
Members of the Nassau Interim Finance Authority, a state board that took control of the county's finances in 2011, also said last week that the county's budget remains in the red when using state-approved accounting methods reflecting the difference between recurring revenue and expenses.
Maragos put the NIFA-calculated deficit at $85.5 million for 2012, but said the Mangano administration had cut the so-called "structural gap" in half since taking office in January 2010.
"All in all, a good year," said Maragos, who last year predicted a $45 million deficit for 2012.
The year-end results won't be official until next month, when outside auditors complete their review of Nassau's books.
NIFA member Chris Wright said that despite differences in accounting methods, "there's no confusion about the fact that should these numbers not change when the audit is complete, the deficit is triple the amount required to trigger a control period." State law requires NIFA to take control when the county's deficit exceeds 1 percent of its budget, or $28 million.
Weitzman, who is seeking the job he lost to Maragos four years ago, called Maragos' surplus "a work of fiction." He noted that a Wall Street firm had just dropped Nassau's credit rating.
"It's impossible to say the county's financial situation is getting better and better in the face of a steady downbeat of bond downgrades," Weitzman said.
Fitch Ratings on Tuesday downgraded $1.5 billion in long-term county debt by a notch, from A+ to A, with a negative outlook. That placed the county's rating at the same level set by Moody's Investor Services, which rates Nassau at A2.
Moody's and Fitch each have lowered Nassau's credit rating twice since January 2010. Standard & Poor's rating remains a notch higher at A+.
Maragos said the Fitch downgrade reflects future budgetary challenges Nassau faces.
Some Democrats said debt costs were lower than expected because party lawmakers had refused to approve tax refund borrowing last year.
Maragos said the county surplus comes despite an unexpected $10 million bill for superstorm Sandy recovery. He said Nassau spent more than $100 million on Sandy-related expenses but expects to eventually get 90 percent federal reimbursement.