Mangano vetoes budget amendments that strip out tax hike

By ROBERT BRODSKYrobert.brodsky@newsday.com @BrodskyRobertNovember 6, 2014

Nassau County Executive Edward Mangano issued the first vetoes of his administration Thursday as he moved to restore a 3.4 percent property tax increase that county lawmakers had removed from his 2015 budget.

Mangano vetoed seven amendments to his $2.9 billion budget that legislators said would offset $31 million in new tax revenues, along with $1 million for mental health and substance abuse programs. Mangano, a Republican who took office in 2010, said the initiatives used "risky one-shot revenues and expense reductions that violate sound budget practices."

He said his vetoes preserve Nassau's "fiscal integrity and the delivery of essential services in light of current economic conditions, particularly the unusual and disproportionate decline in sales tax receipts."

Members of the GOP-controlled county legislature have until Nov. 13 to override Mangano's veto. Presiding Officer Norma Gonsalves (R-East Meadow) declined to comment Thursday, while Minority Leader Kevan Abrahams (D-Freeport) said Democrats have filed a resolution to override the veto. An override requires 13 of 19 votes.

"We still feel the tax increase is wrong for Nassau's working families and call upon the Republican legislative majority to call for an immediate special session of the legislature and join us to override this tax increase immediately," Abrahams said.

If the legislature takes no action, the budget, including the tax increase, would go to the Nassau Interim Finance Authority, a state monitoring board that controls the county's finances, for final approval.

Mangano's vetoes came the same day that NIFA chairman Jon Kaiman said in a letter to Gonsalves that the board would not pass the legislature's budget unless it includes the tax increase or cuts $32 million in operating expenses.

"The county legislature's budget simply fails to meet any standard of accounting or accountability," Kaiman wrote.

For example, Kaiman said NIFA would nix a legislative proposal to use $11 million in bond premiums because it would allow borrowed money to be used to pay operating expenses.

The county receives premiums when it issues bonds for road repair or other construction, and requests more money from the market than it needs for the projects. The county must pay higher interest on the additional borrowed funds.

GOP legislative officials defend the use of premiums for operating expenses, noting that counties across the state engage in the practice.

In 2010, then-Democratic County Executive Thomas Suozzi included $25.2 million in premiums in his budget for operating expenses.

NIFA banned the practice in 2011, saying "generally accepted accounting principles" do not allow the use of borrowed funds for operating expenses.

"There does come a point when you should stop trying to fund this year's government operations with future taxpayers' dollars," Kaiman said in his letter to Gonsalves.

Other legislative amendments reduce the budget for contracts for which spending has not yet occurred by $13 million; restructure debt to save $7 million and provide for more aggressive collection of fees and fines, for $1.2 million in revenues.

Kaiman called the measures "speculative at best" and said Mangano and his staff already have proposed many of them.

Kaiman said if such savings materialize, they should go to cover "risks" in the 2015 budget such as lower-than-expected sales tax revenue or higher-then-anticipated retirement payouts.

Mangano's proposed property tax hike would cost the average household $41 a year.

He said the tax increase was necessary to help offset an "unexplainable" drop in sales tax receipts that could leave the county with a $70 million budget hole by year's end.Residents with combined household incomes below $500,000 would receive a credit for the tax increase through a state rebate program, Mangano said. Households with income above that threshold and businesses cannot get the rebate.