Editorial: NIFA's option to take control
Christopher Wright, right, addresses a meeting of the Nassau County Interim Finance Authority (NIFA) while Chairman Ronald Stack, center, listens during a meeting in Uniondale. (March 22, 2012) Credit: Newsday/Thomas A. Ferrara
The time is approaching for Nassau County's financial control board to seize control. The county will close out 2011 with a $170-million deficit, and counties aren't allowed to run deficits. Claims that Nassau will end up with a small surplus are meaningless mirages based on borrowing.
Projected future deficits look even worse, and the county has already borrowed billions to cover past deficits.
These debts have been created through manipulations that the Nassau Interim Finance Authority, the state-appointed control board, should curtail. Last year, NIFA was faced with the choice of shutting down the county's government or letting it borrow. It chose to let Nassau borrow to operate, and count on three years of loans totaling $450 million, in return for $150 million in recurring expense cuts that would go a long way toward eventually bringing the budget into balance. This page supported that.
Now, part of that borrowing NIFA approved for this year is being held up by Democratic legislators to entangle it with a separate issue, the drawing of new electoral districts. This is a tactic they should abandon. Meantime, the borrowing of more than $100 million should go ahead to buy some time and to meet current obligations.
But that time must yield a legitimate plan. The county did not find cuts as large as NIFA demanded by a Feb. 1 deadline. It has outlined only about $90 million in reductions and not all of that is based on solid math.
The flaw in the law that created NIFA is that the only weapon the board has to fight out-of-whack county budgets is the nuclear option -- a government shutdown. Board members are understandably loathe to deploy that weapon. But bombs don't deter bad behavior if people know you won't detonate them. This situation has worsened for a decade, under Democrats and Republicans alike, and will deteriorate as long as NIFA lets it.
In the long run, voters must decide whether they want more taxes, fewer services, or both, and elect politicians who will impose those wishes. Nassau County Executive Edward Mangano has ruled out tax increases, so right now, NIFA needs to set a hard date by which Mangano must deliver cuts.
If Mangano misses that deadline, NIFA needs to stop the borrowing cold. It's the only way the control board can control the ever-growing and unsustainable indebtedness of the county.
