Tired, perhaps, of protests from Nassau County Executive Edward Mangano and the county legislature that the budget cannot be cut enough to be balanced, the state board charged with overseeing Nassau’s dismal finances took an unusual step a few months ago. The Nassau Interim Finance Authority hired consultants for $100,000 to recommend cuts and savings.
NIFA accepted a report by Capital Markets Advisors on Monday that highlights almost $80 million in potential savings. Some are just common sense and good management, and ought to be implemented. They include saving $1.2 million a year by eliminating physical payroll checks, $2.7 million a year by cutting legislative staff and another $600,000 by reducing Board of Elections personnel.
But the big savings would be controversial. Contracting out ambulance service could save $15 million a year, but enrage unions. Eliminating crossing guards, which the county has no obligation to provide, would save $14 million but raise a ruckus with parents or with school districts that might have to provide them. Every big cut in the report, from eliminating youth services to closing the marine bureau and mounted police unit to saving $5 million by putting park maintenance on towns and villages, or ending it altogether, would make many residents angry.
NIFA has generally considered the question of how to cut spending and whether to raise taxes to be the domain of elected officials. Even now, NIFA is not mandating or even actively recommending the spending reductions in the report. But board members believe such cuts might need to be made in 2018. And thanks to the political atmosphere and timing, they fear that NIFA itself might finally have to impose the cuts.
The county is expected to end 2017 with a $57 million deficit, down from $83 million in 2016. The improvement is largely thanks to better-than-projected sales tax revenue and NIFA’s pressure to cut spending. But NIFA wants that deficit number headed toward zero. The projected shortfall is $145 million for 2018. Every county labor contract for a total of about 7,000 employees ends on the last day of 2017. And no one else has much incentive at the moment to fight for painful budget-balancing.
The second term of Mangano, a Republican, is winding down. He decided not to seek re-election while he fights federal corruption charges. The candidates vying to replace him are unlikely to promise huge cuts in services or tax increases while scrambling for votes ahead of the November election. And the county legislature, also on the the fall ballot, has consistently been the weakest link in any attempt at fiscal responsibility — whether by decreasing spending in a county that’s $3.5 billion in debt or increasing tax revenues with hikes below the state property tax cap.
But NIFA has the same powers it had when it imposed a control period in 2011. And it has known where to cut spending, thanks to an exhaustive report by the consulting firm Grant Thornton that year that spelled out $319 million in reductions. So while NIFA is right to worry that elected officials won’t have the courage to balance the budget, which is a necessity, the board has rarely shown that it does, either.