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In Nassau, Marlin mocks Maragos' 'miracle' as a mirage
From George Marlin, the most outspoken member of the Nassau Interim Finance Authority, comes this statement on Comptroller George Maragos' and other GOP officials' professions of a budget "surplus":
The County Comptroller’s declaration that Nassau ended fiscal year 2012 with a “miraculous” surplus was absurd. It was a mirage, not a miracle.
I am shocked that after 3 years in office the Comptroller does not yet understand that a budget is balanced only when tax and fee income is equal to expenditures.
The claim that the County will end 2012 with a $25.5 million surplus was not measured on a GAAP basis, which is required by the NIFA statute, and was contrived by fiscal gimmicks that do not address the County’s structural deficit.
In 2012, the County kicked the fiscal time-bomb down the road by not paying $72 million in tax cert refunds, deferring $32 million in pension costs through the system’s amortization option, used $40 million in bonded termination costs and used $17 million from closed-out capital projects which had previously been funded through borrowings.
No one should be surprised that the County continues to ignore inconvenient fiscal facts. Let’s face it, the County has forfeited its credibility when it comes to fiscal matters. Lest we forget:
- The County claimed it ended fiscal year 2010 with a balanced budget. This was false. The County had to borrow to cover revenue shortfalls.
- The County claimed as late as August 5, 2011 that its budget for that year was balanced. It was reported in News Times that the County CFO told the legislature that day, “the County will have a balanced budget in 2011 and if the Nassau County Interim Finance Authority continues to say otherwise, the State Authority should tell the County how to bring it into balance…‘I know the budget is balanced when a big four audit company signs off on it.’” The County actually ended the 2011 fiscal year with $173.4 million GAAP deficit and a $50.4 million cash deficit.
- The County was legally required to cut $150 million in recurring expenses in fiscal year 2012. The County failed to comply with this requirement and it had projected last fall that the 2012 fiscal year the County would incur a $139 million GAAP deficit and a $25 million cash deficit.
And now the County wants us to believe they have suddenly incurred in 2012 a surplus?
As for its 2013 budget, it is a classic election year document designed to deceive voters. To get by in 2013, the County is ignoring the white elephant in County Hall—Commercial Property Tax Cert refunds. Only $18 million in refunds have been approved for fiscal 2013. These dollars will be allocated primarily to settle residential claims (a/k/a voters). Meanwhile, the backlog in Commercial Real Estate Tax Cert claims continues to grow. The County Comptroller’s office has estimated that the backlog on December 31, 2010 totaled $150 million; $223 million at the end of 2011; $306 at the end of 2012 and is projected to grow to $388 million in 2013. Other experts have suggested the number could be as high as $500 million by the end of this year.
Obviously the County has learned nothing since the control period began two years ago. This may explain why the County’s ratings have been downgraded and may very well be downgraded again.