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Edward Mangano plans end to borrowing for Nassau tax settlements

Nassau County Executive Edward Mangano is seen on

Nassau County Executive Edward Mangano is seen on Dec. 16, 2016. Credit: Howard Schnapp

Nassau County Executive Edward Mangano says he will end the decades-old practice of borrowing to pay for property tax settlements a year earlier than expected after the county finished 2016 with an $80 million budgetary surplus.

But Adam Barsky, chairman of the Nassau Interim Finance Authority, a state monitoring board in control of the county’s finances, disputed the idea that the county ended 2016 with a true surplus, noting that the county borrowed $60 million for tax refunds and $40 million for high-dollar court settlements.

For years, Nassau borrowed more than $100 million a year to cover property tax refunds owed to homeowners and businesses that successfully challenged their assessments. In 2014, NIFA approved a plan that allowed the county to borrow $60 million each in 2015, 2016 and 2017 to reduce the tax refund backlog.

Mangano said the surplus will allow the county to avoid borrowing $60 million this year, essentially ending the practice. “This is a positive step for the county,” Mangano said.

Barsky credited Mangano for ending Nassau’s reliance on borrowing to pay for tax refunds. But Barsky said that under generally accepted accounting practices, which do not allow borrowing proceeds or operating reserves to be counted as revenue, Nassau likely ended 2016 with an $80 million deficit.

“A good portion of this surplus was generated from borrowing,” said Barsky, adding that Mangano also benefitted from strong sales tax revenue and lower-than-anticipated police retirement costs.

Business owners who contest their assessments will now be required to place up to 10 percent of the assessed value of their properties in an escrow account. Funds from that account will be used to pay commercial property tax refunds if the business wins its challenge, eliminating the need for borrowing, Mangano said.

Nassau Comptroller George Maragos, who typically closes out the county’s books in late March, said it was too soon to determine if Mangano’s “unaudited” figures are accurate.

Minority Leader Kevan Abrahams (D-Freeport) said, “the only surplus we see is in rightfully disgruntled taxpayers who are getting a higher-priced government that delivers far less services then ever before.”

Mangano defended the surplus as “real,” saying it was achieved through “smart government initiatives” that controlled spending and cut costs.

Presiding Officer Norma Gonsalves (R-East Meadow) said the surplus is “proof that the fiscal policies implemented by the Republican majority . . . have been successful.” In addition to setting aside $60 million for tax refunds this year, Mangano will use $16.4 million for termination pay and $3.6 million for debt service.

But Mangano faces limitations.

In December, Mangano cut $3.8 million in subsidies to Nassau’s bus service as part of a deal with NIFA to ensure passage of his 2017 budget. NIFA will not allow the county to use the surplus to restore the NICE Bus funding because it is a recurring expense.

NICE has proposed eliminating 10 routes and reducing service on four others because of the funding cut.

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