Nassau's financial control board Monday unanimously approved the county's 2014 budget, but warned it will not agree to the county's plan to borrow $230 million to pay tax refunds next year unless County Executive Edward Mangano cuts an additional $30 million in spending.
The Nassau Interim Finance Authority also directed Mangano to submit a plan for annual expenses to match annual revenue by 2015 to balance his budget, so that the county no longer depends on one-time revenue and borrowing to pay its bills.
"This is, in one sense, nothing new," said NIFA chairman Jon Kaiman. "It was agreed to years back."
NIFA agreed in late 2011 to allow the county to borrow $450 million, including $305 million to pay property tax refunds due to erroneous assessments, over four years in return for Mangano cutting annual labor costs by $150 million.
NIFA member Chris Wright said the county so far has reduced labor costs by $120 million annually. He proposed the condition requiring the county to cut the remaining $30 million in expenses before NIFA agrees to borrow the remaining $230 million to address Nassau's chronic burden of property tax refunds. The county legislature would have to approve the borrowing.
The county legislature so far has approved borrowing $75 million of the original $305 million.
NIFA members noted that Nassau's $2.79 billion budget does not include any additional costs to pay for proposed union agreements and assumes a three-year-old NIFA wage freeze continues. The county continues to negotiate future savings with its labor unions, but Kaiman has said NIFA will not consider paying $230 million in retroactive wages saved because of the freeze.
NIFA staff director Evan Cohen warned that the 2014 budget still includes $92 million in "risks." If NIFA excludes one-time revenue and borrowing, Nassau could end 2014 with a $109 million deficit, Cohen said.
Mangano spokesman Brian Nevin said the county will continue to work with NIFA "without burdening residents with more property taxes."
NIFA also approved $50 million in borrowing for capital projects and $122.7 million in short-term cash flow borrowing primarily to pay for costs related to superstorm Sandy. It trimmed Nassau's request to borrow $30 million to pay police termination costs to $6.5 million, with board members saying the county should use operating funds to pay any additional severance costs.
NIFA member George Marlin, whose term expires at the end of December, said Monday's meeting may be his last. "I wish my colleagues good luck as they continue to grapple with the county's dismal fiscal condition," he said.
New NIFA member Paul Annunziato said he wanted to make it clear that NIFA's role is not to make policy but to evaluate county policies to balance the budget.