The state oversight board that controls Nassau's finances issued an ultimatum Monday night to county lawmakers: increase revenue and cut spending in the 2016 budget proposal or the board will make the changes.
At a meeting in North Hempstead Monday night, the Nassau Interim Finance Authority inched closer to the largest expansion of its powers since it implemented a control period in 2011.
NIFA chairman Jon Kaiman said that without immediate revisions, the board could reject the $2.95-billion budget and send it back to County Executive Edward Mangano and legislative leaders for changes.DataSearch Nassau salariesDataFind out how much seasonal public workers makeDataNassau pay raises
If the board does not accept the revisions, NIFA for the first time could make its own budget changes, Kaiman said.
That could potentially include a freeze on new hiring, spending cuts in all departments and limiting new contracts with outside vendors. NIFA cannot increase taxes or raise fees.
"We are trying to make it as clear as possible to the legislature that there will be consequences if they fail to meet their obligations," Kaiman said.
In a report issued Monday, NIFA said Mangano's budget for 2016 has $191 million in risky revenue assumptions.
The deficit rises to $211 million using Generally Accepted Accounting Principles, which prohibits bond proceeds from being used as revenue, the report found.Those risks include $21.6 million in increased property taxes in the county's major operating funds and $42.8 million in increased county fees and fines.
The Mangano spending plan would raise property taxes by 1.2 percent -- or $23 a year for the average homeowner -- to bring in $12 million in revenue. Mangano would get an additional $9.6 million by drawing down the Environmental Bond Fund, which finances open space and parks projects.
Mangano said homeowners earning less than $500,000 would receive a rebate from the state in the amount of the tax increase. Residents earning more than $500,000 and businesses are not eligible for the rebate. Homeowners will receive the rebate whether the tax increase is approved or not.
"The administration worked close with NIFA and the legislature to implement structural reforms that save taxpayers hundreds of millions of dollars," said Mangano spokesman Brian Nevin. "We will closely monitor the legislative budget process and will have further comment once it is presented for signing."
Republicans and Democrats in the county legislature who will vote on the budget on Oct. 29 say they will strip out the tax increase. Lawmakers are expected to offer proposals for replacing the tax revenue by week's end.
Other risks cited by NIFA include:
$20 million from a proposed video gaming parlor that does not yet have a location.
$10.7 million in sales tax revenue that may not come to fruition .
$6.7 million in police budgeted overtime costs that may be understated by the county.
The county must also plug a $32.8 million hole that opened when NIFA objected to borrowing for police termination costs. Mangano has proposed a number of options to replace that revenue, including lower health insurance expenses and reduced overtime at the county Correctional Center.
Kaiman said the board is "concerned" about the direction of the county, noting the GOP-controlled legislature is poised to increase spending and decrease revenue when it should be doing the opposite. "And that's simply not acceptable," he said.
In response, Presiding Officer Norma Gonsalves (R-East Meadow) said: "Since assuming the majority in 2010, we have cut over $330 million in spending, right-sized government, and protected our taxpayers. Our priorities for the 2016 budget have not changed."
NIFA member Paul Annunziato urged lawmakers heed the board's warning. "It's an important time for the county," he said. "We ought not go backwards from where we are right now."