Mangano wants to resume financing of tax refunds

Starting next year, Nassau County will return to financing its property tax refunds by issuing long-term bonds, pushing millions of dollars in cost into future years, according to a report released Monday.

The decision by Republican County Executive Edward Mangano ends a practice started by Democrat Thomas Suozzi, under pressure from state fiscal monitors, of paying up to half of the $100 million in annual costs of the refunds from the county's operating expenses.

Borrowing to pay the refunds, called tax certiorari or tax cert claims, under the administration of Republican County Executive Thomas Gulotta helped bring the county to near-bankruptcy in the late 1990s.

During the past several years, the watchdog Nassau County Interim Finance Authority, the county comptroller and others have pressed the county to end borrowing to pay for tax certs, which most localities, including New York City and Suffolk, pay out of operating costs.

NIFA had no comment Monday but said in an interim report last week that continued bonding for tax certs and an early retirement program was "fiscally imprudent, unsustainable and a burden on the county and its future taxpayers."

Mangano said in a statement Monday that Suozzi "had abandoned the practice of pay-go," meaning pay-as-you-go, but several budget documents show $50 million of such financing in the current budget that he inherited from Suozzi.

"The problem will only worsen until County Executive Mangano's reforms to the assessment system are adopted," the statement said.

The change of policy was in a report from Nassau's Office of Legislative Budget Review, which noted in a graphic that there would be no revenue from the operating budget, only bonding, to pay for tax certs starting in 2011, but noted the $50 million of operating moneys that Suozzi had already funded this year.

In testimony Monday before the legislature's Budget Review Committee, Comptroller George Maragos said that "continued bonding of these tax refunds, while deemed necessary by the administration, is not a sound budgeting practice."

Maragos said later that the move was acceptable "during a transition period" as Mangano moved to reform the assessment system, and it avoided "turning to tax increases."

Mangano ran a long-shot campaign last year that largely focused on reforming the property tax assessment system, which he said accounts for $1.13 billion of the county's $2.45 billion in outstanding debt issued to pay for roads, sewers and other long-range projects.

Democrats on the Nassau Legislature jumped on the news. "This is the first step to back to the future," Legis. Judy Jacobs (D-Woodbury) said.

Legis. Kevan Abrahams (D-Hempstead) said, "This is bad fiscal practice . . . the county executive is leaning on failed practices of the past to balance the budget."