Nassau progress on budgets and negotiations would signal end of NIFA control

After years of annual deficits, Nassau County is flush with cash. Even so, it remains in a control period imposed in 2011 by the Nassau Interim Finance Authority, the state oversight board which has watched over county finances since state lawmakers created it in 2000 to combat Nassau’s budgetary blunders.

When the county is not in a control period, NIFA’s job is limited to keeping tabs on the county’s finances, writing reports commenting on the coffers, and maintaining county debt borrowed in NIFA’s name. Now, since a new bill passed in Albany this year added powers, NIFA will also be responsible for auditing the county’s off-track betting corporation, the Nassau University Medical Center, and the county’s industrial development agency.

But because it is currently in a control period, NIFA’s seven-member board can also reject county borrowing, contracts and budgets, impose wage freezes, and direct the actions of some county officials. 

It’s a lot of power and responsibility for an unelected board, and NIFA is not meant to have that power when county finances are stable. But the statute that created NIFA — and said it can take control when deficits exceed 1% of Nassau’s budget or when the county is not paying its bonds — is less clear on how and when NIFA can, or must, end a control period. 

The law reads, “The authority shall terminate any such control period when it determines that none of the conditions which would permit the authority to impose a control period exist."

Nassau’s Republican leaders who took office this year, County Executive Bruce Blakeman and Comptroller Elaine Phillips, say the control period should end. But NIFA board chairman Adam Barsky argues, correctly, that the control period shouldn’t end if that act is going to cast the county right back into fiscal chaos. Barsky would like to see Blakeman clear the bar of settling union contracts and producing an annual multiyear budgeting plan in September that is sensible and balanced even in the out-years.

Barsky and other board members rightly say that even if the county is ready to come out of its control period, endangered NUMC with its towering deficits is not ready to exit its own separately created control period. And the law is unclear on whether the NUMC control period can be maintained if the county’s is not.

Nassau’s big surpluses are due more to COVID-19 money, NIFA refinancing of Nassau’s debts, and hundreds of millions of dollars in unexpected sales-tax revenue than great management. And what prudence is responsible for the improving finances so far is former County Executive Laura Curran’s prudence, not Blakeman’s.

It’s not unreasonable to demand proof of strong fiscal management via budget planning and contract negotiations before lifting the control period. But if Blakeman's administration manages that, it would be time to let the officials Nassau voters have elected take control once again.