Report: Nassau to end year with balanced budget

Nassau County is expected to end the year with a balanced budget, according to a report by the comptroller, but only because it includes at least $167.6 million in one-shot revenues, expense deferrals and borrowing, much to pay property tax refunds.

In a report looking at Nassau's first six months under County Executive Edward Mangano, fellow Republican George Maragos said the administration had reduced expenses by $47.8 million. But he warned that the structural deficit - the difference between recurring revenues and expenses - remained "alarmingly high" at $213.8 million, which he blamed on the previous administration.

To address it, Mangano's budget projects using $70.6 million in one-shot revenues and at least $79.8 in additional borrowing, including $53 million for property tax refunds.

In recent years, the Nassau Interim Finance Authority, a state-appointed fiscal monitoring board created in 2000, has repeatedly warned the county against borrowing to pay operating expenses, particularly property tax refunds. "Borrowing for [tax refund] payments was one of, if not the pre-eminent reason, for the original fiscal crisis of the county, which led to the creation of NIFA by the state. We cannot begin down that road again . . . " NIFA wrote in letters to County Executive Thomas Suozzi in 2007 and 2008.

Still, Mangano spokesman Michael Martino praised the report's finding, saying it "serves as further proof that . . . Mangano saved taxpayers $49 million, including a reduction of $39 million in payroll expenses."

But the legislature's minority leader, Diane Yatauro (D-Glen Cove), said, "This administration builds its fiscal policy on borrowing and more borrowing." She added that the comptroller's report "reads like a humorous work of fiction."

In his report, Maragos said revenues will be $94 million less than budgeted, and even after the one-shots and borrowing, the county has to do more to close a $46.2 million deficit for 2010.

Maragos proposed several ways to reduce that deficit, including borrowing $50 million more to pay for property tax refunds, which could lead to a small surplus if all were enacted.

The comptroller also noted that the county has "almost depleted" its reserve fund, which stands at $14.4 million, down from $207 million in 2005.

Maragos faulted the Suozzi administration and NIFA for failing to heed the warnings of his predecessor. He said NIFA, for example, could have interceded to curtail expenses.

But NIFA chairman Edward Stack said Maragos does not understand his agency. "The NIFA statute does not empower NIFA with any ability to 'intercede' in the county and thus we are mystified by the comptroller's comments."

Suozzi aides said he had no comment. But Yatauro defended the budget presented when Democrats were in control in 2009. "The 2010 county budget is conservative. Sales tax income is now at 6.5 percent - $40 million over budget," she said. "And we had $30 million in contingencies in it to protect us from any revenue shortfall."

The legislature's presiding officer, Peter Schmitt (R-Massapequa), said he would take a surplus over a deficit any day. "I look forward to continuing the work that is bearing fruits," he added.

Maragos said: "We urge the Mangano administration, legislature and NIFA to work hand in hand to break with these long-established financial practices in order to restore the county to fiscal health."

With Celeste Hadrick