Nassau still needs NIFA

Nassau County's $79.7 million budget surplus is a welcome shift from where the county was five short years ago, when its deficit stood at $61.2 million. But that financial turnaround is also a reminder that it could easily turn again — for the worse. That's especially true because the current surplus is built on a tenuous foundation, in large part made up of fluctuating sales tax revenue and one-shot federal COVID-19 relief money.

Will Nassau be able to manage its fiscal house when budgets tighten or the economy turns?

For now, the county and its taxpayers are protected a bit, thanks to the Nassau Interim Finance Authority, or NIFA. Just two years ago, the authority refinanced Nassau and NIFA debt, saving the county $435 million in bond payments. NIFA was created in 2000. When the county is not in a control period, the body can act as a watchdog, keeping an eye on Nassau's finances and maintaining debt. But when the county is in a control period — as it has been since 2011 — NIFA has a larger role to play, with a powerful say over county budgets, borrowing, contracts and labor agreements, and the ability to institute wage freezes. 

County officials argue that such control is no longer necessary, that they can keep their ship upright on their own. But just as easily as sales tax receipts rise, so could they fall. Just as quickly as federal dollars flow, so will they stop. And other unknowns — from the future of Nassau University Medical Center to the possibility of a coming recession — loom large.

That uncertainty is reason enough to maintain NIFA's control period. The possibility that Nassau could slide back into bad habits, including reckless borrowing that got the county into trouble in the first place, is very real.

History shows that relinquishing NIFA control could quickly land the county back into fiscal hot water. When former County Executive Tom Suozzi thought he had turned the county's finances around during NIFA's first control period, which lasted from 2000 to 2008, Suozzi forcefully argued for an earlier end to the control, saying it was "time to move on." But then-Republican State Sen. Dean Skelos successfully pushed for NIFA's role to continue. Three years later, under Ed Mangano's administration, the county's troubled finances and unbalanced budget led to a new control period, which continues today.

If that chronology has taught us anything, it's to be very careful before wishing away the very entity that has kept the county in check.

A year ago, NIFA asked the county for additional information about county finances and never received a response. County officials say they're preparing one now. Until county leaders can, at the very least, provide appropriate answers to NIFA's questions, and show they can manage Nassau's finances through less-flush times, NIFA's role remains a necessary one.