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Long IslandColumnistsJoye Brown

Nassau County’s fiscal control board signals change in tactics

The Nassau Interim Finance Authority last week gave the county 30 days to develop plans to trim its more than $100 million budget deficit.

Which probably sounds like another round of blah, blah, blah.

But there’s been a switch in the script, amounting to the first test of new NIFA chairman Adam Barsky’s leadership and an authority reorganization geared toward pressing the recalcitrant county into compliance.

Here’s how things usually go:

NIFA to Nassau: Fix your finances. Nassau to NIFA: (long pause) OK.

Then nothing much happens. Which is why Nassau’s had a state financial control board, in some form or fashion, for a decade and a half.

To free itself, to gain financial independence, Nassau needs only to do one thing: balance its budget. Not with borrowing or switching revenue from one fund to cover expenses in another, but with revenues that actually match expenditures.

To be fair, Nassau’s balancing act is compounded by the onerous expense of paying off successful challenges to property taxes — and most challenges are successful.

Still, over a decade and a half, there likely were ways to more aggressively attack cost-cutting (how about some of the outside contracts under investigation by prosecutors?) and tap more stable sources of revenue (unlike last year’s unsuccessful school speed camera rollout).

This time around, there’s a back story.

NIFA had been seeking information from the county for months on how it planned to trim its nagging $80 million structural deficit — before frustrated board members, on July 1, unanimously passed a resolution putting a time limit on the request.

Nassau responded within a day. In that response, Nassau noted that the county was anticipating a series of moves — including trimming Nassau’s snow removal budget, before this year’s snowy season — to meet the goal.

Nuh, uh, NIFA replied, in an email on Friday that pointedly, politely and professionally gave Nassau 30 more days to come up with a real plan.

Last year, as part of an agreement with NIFA, the county agreed to limit its 2016 deficit to $80 million. Halfway through the year, however, that deficit stands at $103 million — because the county borrowed $60 million to pay property tax refunds, moved $3 million from reserves to help restore NICE bus routes and used $40 million in extra revenue from bonding to cover expenses.

In short, the county covered expenses by borrowing, and moving money around — which, alas, does not count for balancing a budget under generally accepted accounting principles. That’s why NIFA — as allowed by a recent restructuring that permits it to examine and push Nassau to address budget deficits during the year, rather than at the end — is pushing, and hard, for more.

What happens if Nassau drags its feet? Barsky, in an interview Tuesday, said NIFA would have no choice other than to get tougher — that is, to begin denying borrowing requests that might have been approved before, or kicking back expenses that might have gotten the thumbs-up before.

“We need to see them being more proactive in cutting back on expenses,” Barsky said. “We are going to push them as hard as we can to get under that $80 million deficit number, and to keep getting under the number so they can be rid of NIFA.”

Is it possible that Nassau could be awaiting resolution of a proposal to lease its sprawling sewer system to a private investor — in exchange for an upfront payment of hundreds of millions of dollars — to close the budget gap?

“That’s going to be a long time in the making, off in 2017,” Barsky said. “We don’t have to approve that, either.”

In short, he said, Nassau has to “be thinking about proactive measures rather than just hoping for good luck. They may not take the deficit seriously, but we do.”


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