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Projected Nassau deficit jumps to $384 million due to virus fallout

"We got to keep cash coming in, we got to make payroll," said Nassau County Executive Laura Curran, seen on Sept. 16, 2019, of the increased projected shortfall due to the coronavirus pandemic. "We need help from the federal government." Credit: Howard Schnapp

Nassau County is projecting a $384 million deficit in its $3.5 billion budget for 2020, a significant increase from the $261 million budget shortfall county officials predicted only a month ago when they first detailed expected revenue losses due to the coronavirus pandemic.

“It’s devastating,” said Raymond Orlando, Nassau's Deputy County Executive for Finance. “The impact of the COVID pandemic on the county’s finances is devastating."

“We got to keep cash coming in, we got to make payroll,” Nassau County Executive Laura Curran said Thursday. “We need help from the federal government.”

The county's Office of Management and Budget released projections Thursday in its monthly financial report to the Nassau Interim Finance Authority, a state board that controls county finances.

Sales tax receipts will fall by about 20% this year, or $261.7 million, according to the report. A county report last month had predicted a roughly 10% loss, or a decline of $136.1 million in sales tax receipts.

Sales tax collections, Nassau's largest single source of revenue, make up 40% of county revenues.

The budget office report predicts a revenue shortfall of $438 million this year. However, the budget deficit is expected to be lower — $384 million — largely because Nassau is delaying filling new positions funded in the 2020 budget, officials said.

In a report last week, the Office of Legislative Budget Review said through May 12, Nassau County had collected a total of $313.9 million in sales tax receipts, a decrease of $11.8 million, or 3.6%, compared with the same period in 2019.

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"Until the economy reopens, the drop in sales tax revenues is expected to persist and there may not be enough time for a recovery to positively impact" the 2020 budget, OLBR said.

The Nassau County Comptroller's office on Monday issued a report by national consulting firm Crowe LLP that said if a second wave of the pandemic occurs later this year, sales tax losses could reach $665 million to $1 billion in 2020 and 2021. 

The sales tax shortfalls represent an "unprecedented gut punch to the county's finances," said Comptroller Jack Schnirman. "No municipality can withstand that level of revenue loss without assistance."

Schnirman continued, "while difficult choices will be on the table, you can't tax and you can't cut your way out of a challenge this great."

Schnirman noted that Nassau, as of 2018 audited financial figures, had a deficit of $21.9 million in its unrestricted fund balance, or "rainy day" fund, which can be used to cover shortfalls.

NIFA Chairman Adam Barsky said in a statement, "The County is facing unprecedented financial stress which will require putting every option on the table."

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