Nassau's state-backed financial watchdog approves county's $4.4B budget with condition

Nassau's state-appointed, fiscal monitoring panel approved the county's $4.4 billion operating budget for 2026 on Thursday night, on the condition that the Blakeman administration provides a contingency plan by March 15 on plugging a potential shortfall next year.

Members of the Nassau Interim Finance Authority, or NIFA, who must sign off on the spending plan adopted in October, say about $100 million of revenue is deemed "at-risk." For the second consecutive year, they are also warning County Executive Bruce Blakeman, a Republican, and the Republican-controlled legislature about using reserve funds for expenses as opposed to building new, recurring revenue streams.

Gaining NIFA approval this year is an improvement over last year, when the panel rejected Blakeman's budget proposal for not adhering to generally accepted accounting practices. They also cited $30 million reserve fund use, structural budget deficits and overreliance on federal pandemic funds. NIFA forced the administration to go back and revise the 2025 budget, which it ultimately approved.

"While we are approving this 2026 budget, we are concerned. It's a very shaky budget. There could be a deficit next year and it could mean the county will rely on reserves for expenses," NIFA Chairman Richard Kessel told Newsday.

NIFA analysts say the county's projections on one of its main sources of revenue — sales tax — were overestimated in 2025 and are likely to be off in 2026, too. Sales tax revenue makes up about 45% of the total revenue to the county. 

"County’s growing reliance on reserves in moderately strong economic times demonstrates a lack of long-term fiscal discipline. Simply, the County will deplete its rainy-day funds before it starts to pour," analysts wrote in their Oct. 24 report.

The county in September had $729.6 million in reserves, of which $488.1 million had been earmarked to support the 2026 budget, according to the NIFA report.

NIFA's report strongly warns against "one-shot uses of various reserves" to balance the 2026 budget.

"Although the purpose of reserves should be to smooth the impact of unanticipated revenue shortfalls and expenditure overruns, their now-routine use at the beginning of the year demonstrates the absence of lasting improvement in the County’s fiscal strength and risk management," NIFA analysts said. 

Blakeman on Thursday night said in a statement that he is "pleased that NIFA is approving the county budget" and he is "happy to report to them on the status of the budget in March." 

The 2026 budget also underestimates the cost of employee health insurance and takes into account an employee buyout program that has not yet been finalized by the county's five major workers' unions, NIFA officials said.

The voluntary separation incentive program, first reported in Newsday in September, was framed in Blakeman's preliminary budget as a way to raise $37 million through regular attrition and offering $2,000 per year of service to employees who have worked for the county for 10 or more years. Democrats in budget hearings questioned whether it would produce the intended cost savings, ultimately voting in October against adopting the budget. 

Kris Kalender, president of the Civil Service Employees Association Local 830, which represents a majority of the county workforce, said his members would probably be impacted the most, but the program hasn't been agreed on. He told NIFA officials he did not think the savings could be assured.

"The county is counting $37 million in savings from an incentive that hasn't been negotiated," Kalender said. "We're open to an incentive, but not one that leads to permanent staffing reductions or increased workloads for our members, especially in critical areas like 911 and Child Protective Services."  

By Candice Ferrette

candice.ferrette@newsday.comcandiceferrette

Candice Ferrette covers Nassau County government and politics on Long Island. She has been a reporter at Newsday since 2011.