Katie, bar the door.
Because the Nassau Interim Finance Authority is considering imposing cuts in the county budget. That’s right: An unelected board of directors charged by the state with policing the county’s budget could be poised to start swinging a cleaver.
Could it be, say, some percentage of Nassau’s $2.99-billion budget for 2018?
Could it be a mandatory percentage trim of each department’s budget — with the incoming county executive being left to decide what gets cut, and specifically from where?
Could there be a second NIFA-imposed wage freeze for union workers lurking in the new year?
It looks ominous, potentially, since NIFA in its 17-year history has never imposed cuts. By statute, that is the only direct route NIFA can take since it cannot raise revenues.
Officials said Wednesday that the board would talk — in twos and threes, rather than in a planned NIFA-wide conference call, which, if there were a quorum, would violate state open meeting laws. Then the board will decide how to proceed.
The intent is to have a budget, balanced as much as possible by recurring revenues and recurring expenses, in place by the end of December.
Could NIFA finally end up forcing Nassau into good budgeting practices? Fitch Ratings, in a Wall Street bond-rating report released Tuesday, appeared to have doubts.
“NIFA has taken an active role, rejecting the county’s financial plans when it believes revenue estimates are optimistic or spending measures insufficient,” Fitch said. “However, so far, NIFA’s ability to instill conservatism into the county’s financial practices appears limited.”
Fitch, to be fair, did note NIFA’s oversight role as a positive for Nassau’s finances. The rating agency also identified some improvement in how Nassau manages its finances, including moves to stop borrowing for severance and other expenses.
Nonetheless, there are barriers ahead. They include a less than optimal reserve fund, and a whopping $801 million — out of total county debt of $3.2 billion — attributable to property tax refunds.
Fitch also notes that Nassau has a pattern of doing what is necessary — such as reducing staff, or dipping into reserve funds — to fix budgets.
But that has not been enough to free the county of NIFA’s control, which only will end when the county produces a budget balanced without significant one-shot revenues or borrowed money.
Nassau isn’t there yet.
Which is why NIFA is considering whether to do the extraordinary by wading in and doing part of the job themselves.
The board is to announce its plans during its next meeting, slated for Dec. 7.