Nassau lawmakers likely thought their job was over last week when they passed amendments to fund next year’s county budget.
Because the Nassau Interim Finance Authority probably will make short work of rejecting, and then bouncing the budget back for revisions on Nov. 29.
And if lawmakers don’t get it right a second time — by swapping out revenues NIFA’s already labeled as speculative for cuts or other funding — the fiscal control board is ready to order cuts. And if lawmakers don’t follow those orders, well then, NIFA could go to court to ensure a balanced budget.
And if that doesn’t work, the authority will — as it warned — turn down Nassau’s requests for borrowing and contract approval.
“They have to make some tough decisions,” Adam Barsky, NIFA’s chairman, said in an interview. “We are going to do what we can do to get them to understand the severity of the situation, and their role in it.”
Nassau’s 2017 budget is at least $36 million short in revenue. The government’s role? Rather than go for, say, a tax increase to pump up revenue or cuts in services, elected officials — cognizant of how politically unpopular tax increases are — over the past several years have relied on more new and increased fees, and anything else they can find to keep things going.
It’s the 1990s all over again.
Back then, Nassau got rid of its hospital and patched up its budget with land sales that never seemed to go through. The result? A falling Wall Street bond rating, the loss of employees — mostly, as always, lower-paid staff that dealt directly with Nassau residents — and a control board that was supposed to prod officials to do their jobs.
Alas, that was not to be.
Because the squabbles between Nassau and NIFA over what constitutes responsible budgeting just kept going.
This time, Barsky said, things are going to be different.
“I have a board that has different ideas on approach, but one that is united in the view that the county will have a balanced budget,” he said.
But how will this NIFA board get results? How will it avoid tactics — such as unfulfilled promises of cuts and increased revenues by county officials — that have frustrated other NIFA boards in the past?
“We are doing our due diligence and making preparations,” Barsky said. Part of that is reviewing a contingency plan put forth by County Executive Edward Mangano, which calls for cutting many nonmandated expenses, from bus funding to drug and alcohol services.
Mangano, who is under indictment for federal corruption-related charges, has been working with NIFA, Barsky said.
Another part of NIFA’s preparations is taking stock, internally, of just how far NIFA board members are willing to go — up to and including a potential court fight, if necessary, to clarify its powers.
The authority, as it has in the past, can reject and send budgets back for revisions.
The board never has attempted to impact the revenue side of the budget, which makes sense since because it’s doubtful that the authority could, say, mandate property tax increases.
But the authority can operate on the expense side — that is, call for cuts. And this time around, the board has threatened lawmakers by saying it would block borrowing and stop approving contracts unless the 2017 budget is balanced.
But will NIFA go even further by mandating cuts? Can the authority — should Nassau officials step away from managing the budget — determine which county services stay and which go?
Barsky said he believes NIFA can.
“Could there come a point where we have to say, cut all but essential services, which would be public safety, police?” he said. “We may get there.”
But that depends on how far Nassau officials are willing to go in this year’s game of chicken.