Nassau's budget review office is predicting a $126 million payroll deficit by the end of the year unless the county makes additional spending cuts or other budget adjustments.

Although County Executive Edward Mangano has cut hundreds of jobs, the workforce reduction has saved only $57 million this year -- compared with a goal of $150 million -- while police overtime is running nearly twice as high as budgeted, according to a report released Friday by the nonpartisan office.

The county can reduce the salary gap to $60 million if it uses contingency funds and savings from a state reduction in health insurance costs. But Budget Review Director Maurice Chalmers predicted that some departments would run out of money to pay salaries by midsummer without more belt-tightening.

Deputy County Executive Tim Sullivan said the administration is reviewing Chalmers' report and expects to balance the budget by year's end.

The county "is working tirelessly to close the deficit just as we have for the past two years," Sullivan said. "Let's face it. County Executive Mangano inherited a mess."

Legis. Wayne H. Wink Jr. (D-Roslyn) countered that the report shows the "administration and the Republican legislative majority passed an imbalanced budget."

Even if Democrats agree to Republican demands to borrow $41 million to pay tax refunds, Wink said the county needs to make drastic cuts "and they're still not going to cover their mismanagement."

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Presiding Officer Peter J. Schmitt (R-Massapequa) did not respond to a request for comment.

Mangano agreed to cut $150 million in recurring labor costs this year in return for approval by the county's fiscal control board to borrow for some expenses, including tax refunds. Officials for the Nassau Interim Finance Authority estimate Mangano has saved about $82 million so far, which factors in the health insurance savings.

"The county legislature and the county executive need to live up to their own mandate to achieve $150 million in personnel savings as a condition for further borrowing," said NIFA member Chris Wright.

The budget review report said the county has shed 394 workers since last year, saving about $57 million in salaries. But police overtime, budgeted at $22 million, is projected to reach $49 million this year.

The report notes it is difficult to assess the salary gap for each department because the budget assumes $84 million in salary savings, but doesn't specify where the savings would occur. However, the report projects a $1.2 million salary shortfall in assessment, $3.3 million at the elections board, and more than $900,000 in both the medical examiner and county attorney offices.