$375 per Nassau homeowner?
An illustration of currency behind the U.S. Capitol building. Credit: iStock/Douglas Rissing
Today, we highlight a complex issue in the news, provide multiple perspectives and present our view on the controversy. Our hope is to start a conversation that better informs all of us, and we invite you to share your insights. Email letters@newsday.com with the subject line “spending” or tweet to @NewsdayOpinion.
"Who is the best steward of money, the people or the politicians?"
It's a core disagreement in American politics. Conservatives argue taxpayers are the wisest users of their own funds, and support low taxes because governments tend toward waste.
Liberals give governments more credit for spending well, improving communities and helping residents. They argue competent spending on infrastructure, education, health care and child care is efficient and beneficial.
But with unprecedented federal largesse flooding states and communities, those political mores have in some cases gone out the window. Earlier this month, Nassau County Executive Laura Curran, a Democrat, proposed the county distribute approximately $100 million of the federal funding from the American Rescue Plan to 300,000 Nassau County homeowners, basically all of those who benefit from STAR rebates. Sending those checks, estimated at $375 per family/household, might be easier to understand in the context of Curran’s November reelection bid against Republican Hempstead Town Board member Bruce Blakeman.
These tax rebates are a plan that few elected officials from either party will publicly oppose, even as some quietly fume.
President Joe Biden speaks about the American Rescue Plan and the Paycheck Protection Program (PPP) for small businesses in response to coronavirus. Credit: AFP via Getty Images/SAUL LOEB
THE CASE
Awash in cash
When COVID-19 was declared a pandemic in March 2020, economic predictions were dire. Everything that was not essential shut down and 30 million people lost their incomes. Government revenues dwindled as tax collections plummeted. Governmental pandemic expenses were projected to be huge, and the bipartisan push was for more help, faster.
And rightfully so.
Stung by doing too little in response to the Great Recession, politicians and the populace pushed to risk doing too much instead. It worked. And generating excessive debt by successfully propping up an economy, while worrisome, is not as dangerous as letting it implode.
For Nassau, that meant $103 million from the $2.2 trillion CARES Act and another $385 million over two years from the $1.9 trillion American Rescue Plan. It’s a windfall that, along with the simultaneous refinancing of over $400 million in debt by the Nassau Interim Finance Authority, has the county booking budget surpluses for a few years before the federal money runs out and deficits likely reemerge.
It’s becoming increasingly clear that the $350 billion going to states and municipalities is overkill. The excess of funding, though, doesn’t justify Nassau’s $100 million cash splash.
First off, county officials say the money is likely taxable, so that $375 will be more like $250 for many, with about one-third of the money likely going back to Albany and Washington. If the county spent the money, it could use the whole $100 million.
And while federal guidance prohibits outright tax reduction, it’s legal to disburse cash to residents harmed financially by COVID. However, sending checks to every homeowner earning less than $500,000 a year, which is Curran's plan, means plenty of money will go to people who suffered no economic loss, a legally iffy and fiscally silly play.
It also means money won’t go to better and more clearly allowable uses like addressing health care and educational inequities, restructuring the flailing Nassau University Medical Center and improving sewer, water and broadband infrastructure.
The giveaway might also re-energize the Police Benevolent Association’s push for a fatter deal. The membership has already rejected an offer its leaders agreed to, and when members see the county has money to give away their resolve may stiffen. And if the PBA gets a better deal than pacts other cop unions recently agreed to, those other unions get everything the PBA secured, too, thanks to contract-reopening agreements.
Nassau County Executive Laura Curran gathers with supporters to announce she will seek a second term for county executive in Mineola. Credit: Howard Schnapp
THE COUNTER
Taxpayers need relief
Curran and her administration say the burden of high taxes and the cost of living here demand they give taxpayers relief if possible. They say an opinion survey conducted by Hofstra University showed this is what people want, and that it will stop people from fleeing to less expensive states.
And they say the giveback is entirely unrelated to the upcoming election.
THE CONTEXT
Less pain than predicted
Largely thanks to aggressive measures in D.C., state and local governments have not suffered as much as feared even in New York, which was especially hard hit. Revenues have bounced back more quickly than expected, which was becoming clear by the time the 2021 American Rescue Plan was moving.
Republicans said so and should have been heeded.
A neighborhood of houses over Nassau County is seen in this aerial photo on March 1, 2020. For use with future strories on real estate, home sales, housing, property taxes, and assessment. Credit: Newsday/John Keating
OUR TAKE
Find another way
Taxes are intolerably high in Nassau County, and so is the cost of living, but using this $100 million so inefficiently and making it subject to personal income taxes for the recipients won’t improve things much.
If we could identify Nassau residents suffering economically and get them significant help, we’d want to do that, but this plan doesn't.
Nassau has $3.5 billion in debt, and massive needs. Surely, the county can find permissible uses for $100 million that would allow its residents to prosper and improve their quality of life, rather than using the people's money to buy their own votes, and making them pay taxes on it.
