Nassau County's finances propped up by budget tricks

Nassau County Executive Bruce Blakeman declared last week that New York State’s ability to take control of the county’s finances had ended.

There’s just one problem.

Blakeman has no authority to make such a declaration.

State lawmakers created the Nassau Interim Finance Authority in 2000 to provide advice, oversight and, when necessary, control over the county’s finances. Since 2011, Nassau County has remained in a “control period,” giving NIFA power over county budgets, contracts, borrowing, labor agreements and wages. The legislation establishing NIFA makes it clear: Only the NIFA board can end a control period.

And there’s good reason for that.

Blakeman claims NIFA is “no longer necessary” and County Treasurer David Chiang said the county “is in the best fiscal shape it’s ever been in.”

The county’s budget may appear to be balanced, and the county may appear to be fiscally sound. But appearances can be deceiving. The reality is that Nassau County’s finances are stable only thanks to a few budgetary magic tricks. First, Blakeman transferred more than $260 million of federal COVID-19 relief funds into the county’s general fund. Then, he transferred into that fund another $14 million — interest from opioid settlement funds the county hasn’t used.

Without those moves, the county’s budget would not be in balance.

That’s not all. The county’s Office of Legislative Budget Review said Nassau taxpayers will spend $116 million on county workers’ early retirement this year alone. Savings may eventually emerge, but that’s uncertain. County taxpayers also are on the hook for the bonds of Nassau University Medical Center, which is itself in a separate control period, thanks to its fiscal instability.

And NIFA has rightly raised concerns regarding Nassau’s troubled assessment system, leading the authority to begin an audit. Meantime, labor contracts will be coming up later this year; NIFA’s role is critical there.

Blakeman’s announcement comes as he runs for governor against Gov. Kathy Hochul, who, along with other Democratic leaders, makes appointments to the NIFA board. Blakeman may be trying to discredit the watchdog in order to blunt any criticism of his fiscal management.

Blakeman points to the county’s reserves as a strength, but Nassau also plans to use reserves to pay for the early retirement program. He notes declines in his spending on outside counsel, but there’s nothing to stop him from suing to end the control period — meaning more litigation expenditures. Instead of the political word games, Blakeman should work with NIFA to put the county on firmer footing.

The State Legislature created Nassau’s fiscal watchdog to stop the county from going into bankruptcy. The power to step in and take control of finances remains NIFA’s call. But there is one way Blakeman could convince NIFA to end its oversight: Stop relying on fiscal tricks to get the county’s finances balanced.