Mangano, Bellone face balancing county budgets with few 'fiscal gimmicks' available, experts say

As Nassau and Suffolk officials prepare to submit their 2015 budget proposals this month, both counties are again grappling with how to make up millions of dollars in shortfalls after years of cutting thousands of county jobs, raising service fees and borrowing to meet expenses.

Fiscal experts say Nassau and Suffolk -- like other financially distressed municipalities throughout the country -- face a massive undertaking in patching their financial holes, having exhausted many of their major cost-cutting and money-generating options.

"There aren't a lot of fiscal gimmicks left to fall back on," said Lawrence Levy, executive dean at Hofstra University's National Center for Suburban Studies. "The big challenge in both counties is to find a way to drain the swamps of red ink and to do it in a way that doesn't alienate their constituents."

Nassau budget officials have projected a deficit ranging from $71.6 million to $133 million through next year. Suffolk budget officials have said the county faces a projected $170.3 million deficit through 2015.

Nassau County Executive Edward Mangano and Suffolk County Executive Steve Bellone have been tight-lipped about their budget plans, which must be submitted to county lawmakers by Sept. 15 in Nassau and Sept. 19 in Suffolk.

Neither administration responded to requests for comment. But in a July letter to county legislators seeking cost-cutting ideas, Bellone described Suffolk as being "in a state of fiscal emergency."

In Nassau, "the county's finances remain fragile and require long-term solutions," Maurice Chalmers, director of the legislature's bipartisan Office of Budget Review, said in an Aug. 20 report to lawmakers.

Revenue falls short

Both county executives will have to account for sales tax revenue that fell short of initial projections this year. Nassau's budget review office predicted that the county would fall $70 million short of expected sales tax collections. In a July report, Nassau County Comptroller George Maragos projected a $90 million sales tax shortfall. Suffolk budget officials have said the county is facing an $18.4 million sales tax shortfall.

Both counties are pegging some of their hopes on generating money from school-zone speed cameras and Vegas-style slot machine parlors approved by the State Legislature.

Nassau, which started operating its traffic cameras this summer, expects to generate $25 million a year from the cameras, according to Mangano.

Whether that amount will materialize is unclear. A preliminary launch of the program at six summer school sites led to a public outcry. Mangano dismissed $2.4 million in tickets in August after learning some cameras erroneously issued citations during nonschool hours and days.

Suffolk, which plans on operating the cameras by mid-2015, anticipates generating $6.8 million from them next year, according to Bellone aides.

Each county is attempting to fast-track the opening of video lottery terminal parlors with 1,000 machines each. Suffolk expects to generate $5 million. Nassau has said it estimates $19 million in revenue next year.

Robert Lipp, executive director of Suffolk's nonpartisan legislative Budget Review Office, said there is still a long road ahead in tackling the county's deficit. "There are options to be weighed, some of them easier to do than others," Lipp said. "The problem is significant. It took years to create, it's not reasonable to expect that it will be solved overnight."

Nassau and Suffolk are not alone in still trying to respond to the financial stresses spurred by the Great Recession, said Lucy Dadayan, senior policy analyst for the Rockefeller Institute of Government, an Albany-based think tank affiliated with the State University of New York system.

Recession's effects

"Overall, local governments have felt the impact of the recession with some lag," Dadayan said. "Many local governments across the country are still facing fiscal challenges due to soft growth in revenues and increased demand for services . . . most often the measures taken to balance local budgets have been temporary in nature and simply pushed the problems to the future."

Levy, of Hofstra, said it will be "interesting" to see how Bellone and Mangano approach their budget proposals in a non-county election year. Mangano won a second term last year with 59 percent of the vote, campaigning on a message of not having raised taxes during his first term. Bellone is up for re-election next year.

"It gives them a chance to attack these problems in a less political way," Levy said. "Hopefully, they'll be as honest as possible and careful as possible."