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Nassau seeks to increase NIFA’s borrowing authority by $400M

NIFA can borrow money at better rates than the county. The money would be used to pay the county’s commercial tax grievance settlements.

ALBANY — As a deadline nears, Nassau County is pushing state lawmakers to approve two bills it says will allow it to tackle a long-standing problem: the backlog of commercial property assessment grievances.

One would authorize its oversight board, the Nassau Interim Finance Authority, to issue $400 million more in long-term bonds to pay commercial tax grievance settlements. Another would provide the county more flexibility to access the more than $100 million in its “Disputed Assessment Fund” to pay refunds to commercial property owners in a timelier manner, officials said.

In sum, by borrowing money and streamlining payments, Nassau could attack an issue that has hounded the county’s fiscal outlook for years, backers said.

Nassau County Executive Laura Curran is asking lawmakers to approve the measures before the end of the state legislative session, set for June 20.

It’s not clear if the effort will succeed. While the state Legislature tends to approve requests from local jurisdictions, volatility in the politically split State Senate creates uncertainty, officials said.

Nassau contends the NIFA bill is needed because the county cannot immediately pay the roughly $360 million in tax settlements due, Mark Page, deputy county executive for finance, said Wednesday. Authorizing NIFA to borrow money through the issuance of bonds would allow it to spread out payments until 2041 if needed.

“We aren’t able to come up with $360 million in operating money to pay this account. Where are we going to get it from?” said Page, top financial adviser to Curran. “We need to spread out the costs because we can’t come up with all that money at once.”

NIFA previously was limited by state statute to issuing $400 million in long-term bonds. The new proposal would bump that to $800 million. NIFA could borrow money at better rates than the county because of its better credit rating.

Further, the legislation effectively would extend the life of NIFA. The oversight board must remain in place as long as it has debt — its current bonds mature in 2025, according to its annual report.

NIFA has no position on the proposed legislation, spokesman David Chauvin said.

A source said the board could look favorably on the borrowing proposal — but only if there is solid evidence the plan would reduce the backlog of tax settlements.

“All along, people knew NIFA would have to borrow to finally clean up the backlog — but the county has to show it is doing that,” the source said. “It has to go from a theoretical amount to a detailed list of names and amounts due.”

Under the second initiative, the Disputed Assessment Fund would be streamlined so that payments to a specific commercial property owner wouldn’t be tied to deposits the owner made when filing an assessment grievance. Payments could be made out of, essentially, commingled funds. Right now, the fund has some $150 million on hand, but payments don’t go out quickly.

“We think the benefit is we’d be able to pay out in the year the [dispute resolution] comes in, rather than continually building up the fund while sorting through all the details” of individual deposits, Page said.

Both bills are before the Senate Rules Committee — the last step before going before the full Senate for a vote. Neither has been introduced in the Democrat-led Assembly.

A senator from Nassau County said lawmakers understand the urgency of addressing the county’s finances.

Said state Sen. Todd Kaminsky (D-Long Beach): “I think both sides understand that getting Nassau in a better financial state is important, and we also realize that we have to work across the aisle to get anything done under these unique circumstances.”

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