The state oversight board in control of Nassau’s finances voted unanimously Thursday to reject the county’s 2018 budget after lawmakers stripped out $60 million in fee hikes — setting up a showdown with the GOP-controlled county legislature.
The Nassau Interim Finance Authority contends that $31.5 million in budget amendments approved by the Republican majority last month to replace the fee increases are based on overly optimistic assumptions or fail to generate recurring revenue or expense savings.
At a meeting in Uniondale, NIFA’s board rejected the budget and directed lawmakers to find $31.5 million in additional cuts or revenue enhancements by Nov. 27.
“If they don’t make the changes the budget will be out of balance and it will create a fiscal crisis,” said NIFA Chairman Adam Barsky in an interview. “NIFA would have no choice but to impose its own cuts to balance the budget.”
Board member Chris Wright said lawmakers have a “golden opportunity . . . to do the job that they’ve been elected to do; the job that NIFA has otherwise been doing for them for years — to balance the budget.”
Lawmakers voted along party lines last month to amend County Executive Edward Mangano’s $2.99 billion budget by removing increases to a traffic ticket surcharge and to real estate transactions fees.
Mangano, a Republican, had 10 days to sign or veto the budget but declined to take any action. Without his signature, the budget moved to NIFA as if it was signed into law.
“The administration will not sign an unbalanced budget and we await the changes proposed by the legislature and agreed to by NIFA,” said Eric Naughton, Nassau’s deputy county executive for finance.
Mangano did not seek re-election after he was indicted on federal corruption charges. He has pleaded not guilty.
The NIFA board accepted several GOP amendments. They include increasing estimates for existing fee and traffic summonses by a combined $8.5 million; saving $8 million through staff attrition and $6.5 million through a host of department-level initiatives proposed by a NIFA consultant.
But other tactics were deemed nonstarters.
For example, NIFA did not allow the county to use $9.5 million from its fund balance and $10 million in unspent 2017 money because they are considered one-shot revenue.
Plans to increase sales tax estimates by $5 million and to cut police overtime by $5 million are not in line with historical trends, Barsky said. And NIFA contends that plans to save $7.5 million by restructuring county debt would yield only $5.5 million in savings next year — leaving a $2 million budget gap.
Presiding Officer Norma Gonsalves (R-East Meadow) said NIFA was pushing “for unnecessary and burdensome cuts, fees or taxes, none of which are acceptable to this legislature or the county executive-elect,” referring to Democrat Laura Curran, who won the office Tuesday.
Democratic Minority Leader Kevan Abrahams (D-Freeport) accused Mangano of “walking away from the budget. Therefore County Executive-elect Curran should have the next 45 days to work with the legislature to be part of the solution.”
Republicans proposed several contingency items in the budget but they too run afoul of NIFA rules or fail to generate significant savings.
Lawmakers project $30 million in revenue by recovering the value of bond premiums — money generated by borrowing more than needed at higher interest rates. Barsky said borrowed money could not be used to cover operating expenses.
Other options include capturing $2 million in uncollected fines and fees and generating $1.5 million by hiring more inspectors at the Department of Consumer Affairs to inspect and license local businesses.