Nassau should keep NIFA in place for now

As next week's election looms, most Nassau County voters probably wouldn't put the Nassau Interim Finance Authority at the top of their issues list. But the role and future of this watchdog are critical.

Throughout the editorial board's election season interviews, many county lawmakers — Republicans and Democrats — said the county no longer needs a fiscal babysitter. Nassau has a healthy-looking budget replete with surpluses, they said, promising they can handle whatever comes their way.

If only wishing made it so.

The county has been in a control period since 2011, and NIFA has played a powerful role in county budgets, contracts, labor agreements, wages and borrowing. When out of a control period, the authority becomes more advisory, though it maintains oversight of the county's debt for bondholders who save it from bankruptcy. The state's other control boards — for Buffalo, Erie County and New York City — currently operate in that advisory capacity.

In Nassau, despite the fiscally stable picture the county presents, key questions remain.

How much of the county's current stability is due to one-shots — like federal infrastructure dollars and COVID-19 relief funds? How much is due to NIFA itself? What assurances are there that Nassau can steer its ship without one-time cash infusions and NIFA's control powers? What about troubled Nassau University Medical Center? Its financial health is so dire that NIFA's latest report said "substantial doubt exists about [the hospital's] ability to continue as a going concern" — particularly significant because Nassau County guarantees the hospital's bonds.

NIFA sent even more detailed questions in July 2022 to the county, which has yet to provide responses.

When NIFA was established in 2000, state lawmakers set clear standards for commencing a control period. But the guidelines for ending one are opaque, saying the authority can make that determination when "none of the conditions which would permit the authority to impose a control period exist." But how can the authority do that when the county won't answer its questions?

That's one reason former NIFA chairman Adam Barsky and successor Richard Kessel agree that the control period should remain for now. They are correct. NUMC alone is reason for NIFA to maintain its role. Broader threats loom; county budget director Andrew Persich admits that "more structural deficit in the out years … is going to be a problem for us." Undoing the control period, only to have to return to it, makes no sense.

NIFA and county officials should work together on a plan the county must follow to remove the control period. That starts with providing answers to NIFA's outstanding questions and immediately working with NIFA to address NUMC's woes. County officials must show they can better manage their budgets — in good times and bad.