Nassau, Suffolk under 'significant fiscal stress,' state comptroller says

Nassau and Suffolk are the most fiscally stressed counties in the state, according to a new report by state Comptroller Thomas DiNapoli.

The Long Island counties were in “significant fiscal stress” based on year-end general fund balances, cash on hand, short-term borrowing and operating deficits in 2018, according to a report released by DiNapoli last week.

Suffolk was under the most severe fiscal stress of any county in 2018, with a score of 76.7 for the second year in a row, according to the report.

Nassau was in second place for counties, with a score of 72.1, compared with 68.8 in 2017, when it came in third.

In DiNapoli’s report for 2016, Nassau and Suffolk were listed as being in “moderate” fiscal stress.

Three other local municipalities — the City of Long Beach, the Village of Islandia and Oyster Bay Town — also made the significant stress list for 2018. They had respective scores of 80.8, 70.8 and 70.

The threshold for significant fiscal stress is a score of 65 or above. Of the 12 municipalities statewide that meet the criteria, there is only one other county, Westchester.

The key fiscal problem in Nassau and Suffolk is that they spend more money than they raise in revenues, creating operating deficits, state comptroller officials said.

“There’s a mismatch there,” Assistant Comptroller Tracey Hitchens-Boyd said of the difference between the counties’ revenues and expenditures.

Deputy state Comptroller Elliott Auerbach said Suffolk getting the same score in the past two years was “a pretty good sign.”

Nassau’s worsened score was “more alarming,” Auerbach said. “They need to develop some fiscal strength and courage to help them stem this tide.”

Suffolk had an operating deficit of about $26.5 million in 2018 and a general fund balance deficit of $285 million, according to the report.

Nassau had an operating deficit of about $235 million and a general fund deficit of negative $4.5 million.

Suffolk has amassed operating debt of $883 million over the past decade, according to the County Legislature’s budget review office, and has had its bond rating downgraded several times in recent years.

Jason Elan, a spokesman for Suffolk County Executive Steve Bellone, noted the county’s fiscal stress score hadn’t worsened since DiNapoli’s report last year. Elan attributed that to the county’s efforts to reduce debt and deficits.

“County Executive Bellone has been digging Suffolk out of the massive financial crisis that he inherited while protecting taxpayers by freezing the county [property] tax and staying within the [state] tax cap,” Elan said.

While the county’s general fund tax levy has held steady at $49 million since 2010, overall county property taxes have increased by about $80 million since 2013, budget reports show.

Republican county Comptroller John M. Kennedy Jr., who is challenging Bellone for county executive, said Suffolk’s financial condition is in a state of “peril.”

Kennedy said adding insufficient cash flow has made it difficult to pay the county’s bills. “We’re in fiscal collapse and free fall,” Kennedy said.

Christine Geed, spokeswoman for County Executive Laura Curran, blamed past Republican county administrations for Nassau’s fiscal problems.

“We are working hard to clean up the financial messes of the past,” Geed said. Operating deficits decreased from 4.5 percent in 2017 — the year before Curran took office — to 1 percent in 2018, Geed said.

“We are confident that we’re on the right track as we continue to exercise spending discipline while providing county residents with the quality services they demand and deserve,” Geed said.

In August, the Nassau Interim Finance Authority, the county’s financial control board, projected that about $83.4 million in county revenue was at risk in the 2019 budget. In September, NIFA executive director Evan Cohen said Nassau could post a $76 million deficit in 2019.

With Scott Eidler

By Rachelle Blidner

rachelle.blidner@newsday.com@rachelleblidner

Rachelle Blidner covers Suffolk County government, politics and breaking news.