Nassau County brings in significantly less money than it spends, every year, and unless significant changes are made, will keep doing so for the foreseeable future.
It’s standard for Nassau political leaders, no matter the party, to blame annual budget shortfalls on the property-tax refunds the county must pay each year because it guarantees those overpayments to school districts and other local governments for money it never pocketed in the first place. Those refunds have cost Nassau as much as $100 million a year for decades and are a huge contributor to the county’s $3.5 billion debt and its annual budget shortfalls. And about $360 million more in refunds piling up over several years hasn’t been paid out or accounted for in Nassau’s books.
The tax refunds are a big cost, but not an insurmountable one. Even with it, the county simply could have raised taxes or spent less to cover an expense that is, at most, 3 percent of the annual budget, but it never did.
Now County Executive Laura Curran wants the county legislature to authorize the borrowing of $300 million to pay off the backlog of refunds. She says the vexing “county guarantee” problem for residential properties can be fixed by building and defending an accurate tax roll.That roll, and a “deferred assessment fund” that now has $200 million in it paid by commercial property owners to fund refunds on those properties, could fix the problem. However, the annual deficit will still be there. In fact, with more than $20 million a year in interest payments for the new borrowing, things wouldn’t get easier anytime soon.
The difficulties of balancing the budget, political and mathematical, are the root causes of the squabbling between the Democratic executive, the Republican-led county legislature and the Nassau Interim Finance Authority that oversees county finances. NIFA imposed a control period, which grants it extensive oversight powers and will stay in place until the deficit falls below 1 percent of the budget, just over $30 million.
Progress has been made. Year by year, NIFA has gotten tougher. Former County Executive Edward Mangano cut the payroll by 2,000 employees, and got one small tax increase and some huge fee increases through a legislature that has balked at tough decisions.
The deficit, which hit $189 million in 2014, was reduced to $63 million by 2017. But Curran has tried to borrow for operational expenses, like a $45 million legal judgment with iffy explanations about why the money is really needed. And the legislature inexplicably refused to pass a home rule message to let the county borrow money to pay off the refunds using NIFA’s credit, which could have saved a fortune.
Curran and Richard Nicollelo, the presiding officer of the legislature, know what must be done and both say they are willing. Curran needs to fix the property tax assessment system, fiercely negotiate expired labor contracts, and lay out a comprehensive plan for borrowing, taxation and spending that can fund it. The legislature must drop the political posture that it won’t cut spending or increase revenue, and approve hard choices. That is the best way to get NIFA to sign off on the plan.
These are, as the county’s history shows, difficult solutions to achieve. But they’re also the only solutions. — The editorial board