Nassau predicts largest budget deficit in its history

Nassau is projecting a $286 million deficit next year, the largest gap in the county's history, for the coming budget year, County Executive Edward Mangano said Thursday.

To fill that large a hole, the county would have to raise property taxes by 36 percent, a move Mangano is not planning to make. "We still don't believe people in 2011 can afford a tax increase," he said.

Mangano will present ways to stem the red ink in a report next week to the Nassau Interim Finance Authority, a state board that has monitored the county's finances for a decade.

He declined to list those alternatives beforehand, but said they will include savings from a retirement incentive program and reforms to the county's assessment system.

Mangano said it would be premature to include any revenue from a proposed casino at the Nassau Coliseum. "In a four-year plan, could the casino option provide potential significant relief to our taxpayers?" he asked. "The answer is yes."

Mangano, a Republican who took office in January, said he "inherited" the budget gap from former County Executive Thomas Suozzi, a Democrat.

Suozzi, now a consultant for a financial advisory firm and for Cablevision, which owns Newsday, declined to comment.

But county Democrats defended Suozzi's financial management and suggested Mangano was exaggerating fiscal woes.

"I think this is a way to prepare people for the worst so that anything less than a nightmare is a good job on his part," said Legis. David Denenberg (D-Merrick). "He's blaming Suozzi, but Suozzi left office with 13 straight credit rating upgrades."

Legis. Wayne Wink (D-Roslyn) added, "If there's one thing that's clear over the years, Tom Suozzi was always able to manage the revenue. I hope that Ed Mangano is up to the task."

Mangano's top financial aide, Deputy County Executive Tim Sullivan, who developed the deficit projection, said, "These are hard, solid numbers."

Presiding Officer Peter Schmitt (R-Massapequa) agreed. "This is for real," he said.

Mangano said his estimate is more conservative than Suozzi's first gloomy budget proposal after he took office in 2002. Suozzi predicted a $266 million deficit for 2003 based on declining sales tax revenue that didn't occur. His dire prediction helped convince Democratic lawmakers to approve a 19.4 percent property tax increase.

Also, Suozzi in private meetings last year warned 2011 would be very difficult, with one Democratic official characterizing it then as a "financial tsunami."

Suozzi had told NIFA he expected a $126.6 million deficit in 2011 and suggested ways he would close it, some extremely doubtful such as a cigarette tax yet to be approved by the state.

On top of Suozzi's projected deficit, Mangano projects a $12.7 million shortfall in sales taxes from 2009, $16 million less from an unrealized cigarette tax, $2.19 million less in park revenue, while the cost of tax challenge refunds were understated by $50 million, employee health insurance premiums understated by $20.5 million, overtime by $11 million, pension costs by $4.2 million and miscellaneous operations by $1 million.