Nassau County continues to borrow more than $100 million a year to pay its bills, County Comptroller George Maragos reported Monday.
Even with the borrowing, Maragos said in a midyear budget report for 2016 that Nassau is heading toward a year-end deficit of $14.2 million in its major operating funds — though he predicted County Executive Edward Mangano will close the gap through spending cuts.
But Maragos noted that the county still is planning to use $103.8 million in borrowed money and $3 million from reserves to pay its operating costs this year.
Maragos put the structural gap — the difference between recurring revenues and recurring expenses — at $116 million.
Last year, the county borrowed $122 million to pay operating expenses, including property tax refunds and a portion of police severance pay.
“The continuing reliance on borrowings to pay for operating expenses and the deferment of other expenses and liability is a growing issue that must be confronted,” Maragos said in a news release.
He noted in his midyear report, which is required under the county charter, that Nassau’s unfunded liabilities have grown to $904 million — in large part since January 2010, when Republican Mangano took office.
Maragos, a Republican, estimated the unpaid backlog of commercial tax refunds this year at $327 million — double the estimated backlog of $164.3 million at the end of 2009.
He said Nassau has deferred $232 million in pension payments since 2012.
And he projected the county’s costs for utility tax refunds at $345 million. Nassau has continued to fight repayment of the utility tax refunds in cases dating to 1994 even after the state’s highest court ruled in 2010 that the county was liable for repaying the taxes erroneously imposed on utility company equipment.
The Nassau Interim Finance Authority, a state board that took control of the county’s finances in 2011, estimates the county’s 2016 budget deficit at $130.3 million. NIFA had directed Nassau to hold the deficit to $80 million this year. NIFA does not count borrowing as revenues.
“The county spends less and borrows less since 2010,” Mangano said. He added that all borrowing had been approved by NIFA as the county moves toward establishing a process that would eliminate the cost of future commercial tax refunds next year.
NIFA member Chris Wright, a critic of Nassau’s continued borrowing, said, “It’s fiscal Groundhog Day in Nassau County as county officials continue to equivocate over the existence of a deficit, which makes it difficult if not impossible for them to begin the process of actually balancing the budget.”
Maragos also questions 2016 projected revenues, including “the improbable $15 million” from Off-Track Betting video lottery terminals and another $15.8 million in fines against companies that did not submit their required income and expenses statements to the county’s assessment department. The courts have held up imposition of the fines since the county legislature approved them in 2013.
Maragos also notes that the county has yet to realize projected savings from privatizing its sewer and storm water operations.