If it’s truly going to be a new day in Nassau County government, freshly installed Executive Laura Curran and new Comptroller Jack Schnirman need to start off by doing things right. So do the legislature and the Nassau Interim Finance Authority.
Borrowing $45 million to pay off a legal judgment for which funds were already set aside would be the same play residents came to expect under Curran’s predecessor, Edward Mangano.
The county is required to pay that money after losing its appeals in a civil rights suit against a Nassau police detective by two men who were wrongly imprisoned for 18 years in a 1984 rape and murder case prosecuted under then-District Attorney Denis Dillon. They were exonerated by DNA evidence in 2003 and released. In 2016, the county, which had indemnified Det. Joseph Volpe, was forced to put the $45 million in an account it could not touch as a condition of its court appeals. The funds must be paid by Feb. 7.
Although the money is set aside, it was still technically unencumbered until the county lost its final appeal. Curran says paying it out would leave the county almost no wiggle room in its cash on hand, and she wants to borrow the money and repay it over 15 years. Schnirman says that based on current projections, not bonding for it would leave the county with as little as $1 million in cash that’s not already spoken for.
But the cash crunch wouldn’t come next month when Nassau pays the $45 million, which itself is borrowed as part of the county’s routine short-term advances against anticipated revenue. It would come in about 10 months, when that annual loan is repaid. And that gives a county with a $3 billion budget and, supposedly, a new governing strategy, plenty of time to spend less or raise more revenue.
The Nassau County Legislature should reject bonding for the $45 million. Lawmakers are due to vote Monday. And if the borrowing does garner the required supermajority, then NIFA, the state fiscal watchdog, should stick to its increasingly stern tactics and reject borrowing for a legal judgment, just as it did in Mangano’s final years in office.
Despite eight years of promises, Mangano never matched the county’s spending to its revenue and never balanced the budget. Although an improving economy and reduced staffing produced some financial progress, the control period imposed on the county by NIFA is stretching into its seventh year with no easy end in sight.
As a county legislator, Curran voted against long-term borrowing for the $45 million when Mangano tried it in 2016. Now as executive, she has walked into a truly difficult financial situation. The county is cash poor, with high expenses and every union contract waiting to be negotiated. It owes hundreds of millions of dollars in property-tax refunds. It is potentially liable for hundreds of millions of dollars in tax refunds to the Long Island Power Authority. These huge one-time expenses probably will demand long-term bonding.
But this $45 million doesn’t. The money is set aside. The county has time to tighten its belt before the cash runs out. But it will never escape its challenges if it keeps borrowing to avoid changing.