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Although Gov. Andrew M. Cuomo urged Nassau last month to work with its control board to solve the county’s financial problems, a bill moved foward this week in the state Senate to allow County Executive Edward Mangano to bypass the county legislature and the Nassau Interim Finance Authority to borrow millions of dollars to pay overdue tax refunds.
The bill was introduced and read into the record Wednesday of the Rules Committee, chaired by Nassau’s Sen. Dean Skelos (R-Rockville Centre), who is the Senate majority leader. It would amend the public authorities law to allow Nassau to use past borrowing authorizations approved by the county legislature — but before NIFA took control of the county’s finances in January last year — to sell bonds to pay property tax refunds and other judgments.
Although NIFA is required to approve county borrowing, the proposed bill says "approval by the authority shall not be required for borrowings by the county to pay tax (refund) settlements or judgments of any kind authorized by bond ordinances approved by the county prior to the authoritys' declaration of a control periond on Jan 26, 2011."
It would require Nassau to provide at least $6 million annually to the county youth board — a nod to Deputy Assembly Speaker Earlene Hooper (D-Hempstead), who has said she would consider such a bill so long as service organizations from her district receive funding.
The bill also would require Mangano to achieve $100 million in recurring savings in “the county’s 2012-13 fiscal year,” which indicates somebody from the state wrote the bill because the county’s fiscal year runs from January through December, while the state’s fiscal year runs from April through March. The required $100 million is $50 million less than the $150 million that NIFA directed Mangano to save by Feb. 1 to get borrowing approval.
Mangano needs to borrow at least $41 million to pay overdue property tax refunds before outside auditors at the end of this month close the books on 2011. Without the borrowing, the county will end the year in a deficit.
Because borrowing requires 13 votes of the 19-member legislature, Mangano needs at least three Democrats to join with the 10-member Republican majority to authorize the move. Although lawmakers in the past routinely authorized borrowing, Democrats this year have refused to approve any borrowing until they get a “fair” redistricting plan. The current Republican plan, which a court blocked the county from using until next year, draws three Democratic incumbents out of their current districts.
County Attorney John Ciampoli maintains the county can use legislative authorization from 2004-2005 to borrow $192 million to pay the refunds. NIFA used that authorization at the time to borrow the money on Nassau's behalf. The county is still repaying it.
No senator has signed on as sponsor of the Nassau bill, which has yet to be introduced into the Assembly. The proposed bill S7604 can be found on the state senate website.
NIFA member Chris Wright said, " I am hopeful that the state’s legislative leadership will be wise enough to resist the urge to become the county’s partner in fiscal irresponsiblity. Surely the legislative leadership of the state as well as our own county representatives understand that a bill like this would have repercussions, all them significant and all of them negative.”
Here is the text of the bill: