Nassau County Executive Edward Mangano's 2015 budget has a potential deficit of $75.4 million, largely because of declining sales tax revenues, and the shortfall could grow to $221 million if new borrowing is not approved, Comptroller George Maragos reported Wednesday.
In another report released Wednesday, the independent Office of Legislative Budget Review called the budget's sales tax projections "reasonable," and said the possible 2015 budget deficit could be as low as $22 million -- or $173.6 million if bonding is not approved.
In a presentation to the county legislature, Maragos, a Republican, offered a grim picture of Nassau's finances, and said county officials should take immediate steps to create a stronger financial footing.
"The county's fiscal climate has changed significantly due to the steep drop in sales tax revenues," Maragos said. "The county now faces major fiscal challenges and must rely on borrowing and the use of savings to fund operations and pay for tax refunds."
Mangano's $2.98 billion budget hikes spending by $194 million, primarily to fund property tax refunds, employee termination costs, police overtime and outside contracts.
Maragos said at least $75 million in projected revenue may not materialize. For example, he said the county's sales tax revenue projection for 2015 is $40.3 million too high.
The deficit could grow to $221.1 million if the county legislature and the Nassau Interim Finance Authority, a state monitoring board in control of the county's finances, do not approve $151 million in new borrowing. The borrowing, largely for property tax refunds, would increase the county's long-term debt to about $3.83 billion.
Mangano spokesman Brian Nevin disagreed with Maragos' projections and pointed to the Office of Legislative Budget Review's conclusions, which he said generally agreed with the county's sales tax projections.
"The remaining risk is addressed within the budget," Nevin said. "The budget follows the NIFA-approved plan to pay off property tax refunds over time rather than in a single year."
NIFA chairman Jon Kaiman said the control board would review details of the budget. He declined to comment on Maragos' projections.
For the first time since taking office in 2009, Mangano has proposed a property tax increase -- 3.1 percent next year -- to cover a $51 million sales tax shortfall.
Mangano said most homeowners would be eligible for a state rebate check that would cover the full cost of the tax increase. Businesses and families earning more than $500,000 would not qualify.
Minority Leader Kevan Abrahams (D-Freeport) called the tax hike a "significant blow to the economic well-being of the county and its residents. This budget will contribute to the death of jobs in this county."
Legis. Howard Kopel (R-Lawrence) said it's not certain that the majority GOP will support the tax increase. "We intend to try and find a way, if at all possible, to avoid this," he said.
The legislature will vote on the budget by the end of the month.