Nassau Executive Laura Curran said Wednesday she would present a new financial strategy that avoids additional borrowing through the county's financial control board in 2020 to address Nassau's $385 million budget shortfall this year.
The key element of the plan is the deferral for one year of a $75 million payment on bonds issued in 2008 through the Nassau Interim Finance Authority that is due in November. The state-appointed agency oversees county finances and often can borrow money at lower interest rates than the county.
Majority Republicans on the Nassau County Legislature had questioned additional NIFA borrowing, in part because it would extend the life of the control board.
Curran administration officials said they shared the goal of ending NIFA's control period, although last month they proposed a deficit-reduction plan that included additional NIFA borrowing.
The ballooning of the county deficit, largely due to the economic fallout from the COVID-19 pandemic, has been a focus of the administration for months. Like other municipalities across the nation, Nassau County suffered a steep drop in sales tax revenues, which are among its largest sources of income.
The county has a $112 million surplus from the strong economy in 2019, officials said. Nassau also has received $103 million in federal CARES Act funding aimed at cushioning the impact of the pandemic.
Curran and many members of Congress have been vocal about the need for more federal pandemic relief for state and local governments.
“Nassau County’s finances were strong in 2019, ending with a surplus, and we were on a trajectory to emerge from NIFA’s control after almost a decade," Curran, a Democrat, said in a statement. "The COVID-19 pandemic and Washington’s failure to help has made that virtually impossible."
Curran said her administration and the county Legislature "share the goal to get out from under NIFA as quickly as possible to take back control and solve the County’s fiscal deficits. Our new strategy is the best bet to keep us on track while we remain hopeful of support for the Federal government.”
Legislative Presiding Officer Richard Nicolello (R-New Hyde Park) said, “the change in the administration’s plan proves that the Majority was right in opposing the administration’s proposed immediate massive refinancing of county debt through NIFA."
Nicolello continued: "We are pleased that the administration now recognizes that the refinancing is not necessary to close the budget gap in 2020. We will review the full proposal by the administration and will work to achieve responsible and effective solutions to the county’s budget issues without burdening Nassau’s taxpayers.”
Curran has directed her Office of Management and Budget and the county's financial consultants, PFM, based in Holbrook, to review and analyze a refinancing of NIFA debt. That plan also includes $95 million in savings from various county departments and funds.
GOP county lawmakers have subpoenaed OMB Director Raymond Orlando and the consultants to provide documentation and testimony about the refinancing plans at the Legislature on Monday.
Legislative Minority Leader Kevan Abrahams (D-Freeport) said the Curran administration's new approach meets the "daunting fiscal challenges presented by the pandemic without extending the life of NIFA.” Abrahams said he looked forward to reviewing the proposal in detail.
NIFA Chairman Adam Barsky said the authority is reviewing the documents submitted by county and is "steadfast in our commitment to find continued paths toward a more sustainable financial future."