Nassau County back in the red
Up until the coronavirus hit, Nassau County planned a $3.56 billion 2020 budget that balances revenues to the penny. That doesn’t mean it would have, because such plans have to be drawn up to balance whether they actually will or not. But the debt-ridden county has seen its deficits decline dramatically over the past few years, from more than $150 million annually to just $27 million in 2018. County officials hope actual balance was attained in 2019 and could have been maintained in 2020.
But Wednesday, Nassau officials delivered some bad news. Their monthly financial snapshot projects a $384 million deficit.
The bloodshed includes a $438 million reduction in revenue thanks to 20% lower sales tax revenues; 15% less state aid; the disappearance of $20 million in revenue from the staggering OTB; and drops of 50% in the second quarter and 25% each in the third and fourth quarters from other revenue items like red-light camera proceeds and mortgage recording, tax map verification and recreation fees.
On the expense side, the county now projects $54 million less spending, due mostly to leaving jobs unfilled.
Help could come from a new round of federal coronavirus relief funding, but it’s not clear whether that will appear, or how much it might be. The feds already would allow Nassau to borrow about $500 million, but that’s intended as a bridge to cover expenses until delayed payments like property taxes come in.
Nassau Interim Finance Authority Board Chairman Adam Barsky pointed to provisions included in the state budget that allow NIFA to borrow an unlimited amount and extend by 25 years the period it is authorized to bond debt to 2051.
Refinancing the approximately $500 million scheduled to be paid off by NIFA over the next six years over a far longer term could save as much as $80 million a year now. And refinancing debt Nassau owes on its own under NIFA’s far better credit rating and further out into the future could save plenty, too.
But neither NIFA spreading out the county’s current debt payments nor helping Nassau borrow more is a long-term solution, and both could attract opposition, as the county’s unions and many of its legislators wanted NIFA’s powers to sunset in 2026.
And neither take into account the terrible beating future Nassau County revenues have taken in the courts of late, even as NIFA’s ability to short workers on generous contracts during a financial crisis was upheld.
—Lane Filler @lanefiller
Courts deal Nassau's unions a busted hand
For Nassau County Executive Laura Curran, recent court decisions have been a mixed bag, with key wins and significant losses. But for the county’s public-sector unions, it’s been nothing short of disastrous.
The U.S. Court of Appeals last week upheld a lower-court decision that the wage freeze enacted by the Nassau Interim Finance Authority and the county in 2011 was constitutional, calling the freeze that saved Nassau $234 million in payroll reasonable. The court said that the freeze had a “legitimate public purpose” of confronting the county’s fiscal distress.
The county’s property tax rate, the highest in the nation, and the fact that it had pursued other significant cost-cutting measures, including layoffs, were noted as factors in the decision.
It’s an outcome that would have been notable and a big blow to the county’s five unions at any time. But now, the county’s finances are again in ruins, it is still under a NIFA control period, and four out of its five unions are working without a contract. The other brutal blow was on the fees front. While the county will appeal a March State Supreme Court ruling that its $355 tax map verification fee is unconstitutional, its argument is weak. The fee was first imposed in 2012 for just $50. Now it brings in $45 million a year. The ruling called it an “an unlawful and unconstitutional tax,” citing repeated case law establishing that municipalities can’t charge fees that raise more money than it costs to provide the services they cover.
And a State Supreme Court justice ruled two weeks ago that Suffolk County cannot charge a $30 fee on top of its $50 red-light camera fine because the state law allowing red-light cameras bars it.
The ruling could have even bigger implications for Nassau, which adds $100 in administrative fees to each of its $50 red-light camera fines and has raised as much as $50 million annually from the program, with two-thirds of that from the fees.
So Nassau is as broke as it has ever been, two of its main money grabs appear to be illegal, four of its five unions have no contract and NIFA has the power to renege on the county’s labor deals when times are tough enough.
For Curran, the lack of revenue will make budgeting harder but the county's empty pockets and the increased threat of NIFA could make negotiating with its municipal unions easier.
—Lane Filler @lanefiller
Trump knows best
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A look inside BNL's coronavirus fight
When Brookhaven National Laboratory won the world’s first electron-ion collider earlier this year, there was happy talk about great new jobs, global prestige, and a chance at unravelling the great mysteries of the universe.
These days, the lab’s work is more urgent: fighting COVID-19.
Scientists are using the billion-dollar, stadium-sized National Synchrotron Light Source II to map coronavirus proteins, en route to treatment or even a vaccine.
A Newsday Opinion documentary takes you on the floor of that facility and to other parts of the lab where coronavirus work is happening — like the computational side of things where researchers are using supercomputers to sift extremely quickly through experimental data, identifying pockets where drugs can latch onto.
Drug creation is the crucial endgame, and companies are already using the BNL data to move in that direction. We spoke to one chief executive specializing in structure-based drug design, Joshua Carter of Helix BioStructures, who said the advantage of BNL is the lab’s advanced technology and the ability to have “remote access” to the technology itself. “We're able to actually pipe into the facility from here in Indianapolis, and able to control the entire experiment from beginning to end with the staff’s help,” he said.
So this facility in Suffolk County could be the origin for the drugs that help get the world out of quarantine. In the meantime, BNL scientist Sean McSweeney suggested we wear masks and be patient.
“The good news is science works. The bad news is it does take time to do it right,” he said. “And we're in that process where science is working, but it's still gonna take time.”
—Mark Chiusano @mjchiusano