Nassau County is experiencing a political and fiscal meltdown.
In May, state Sen. Dean Skelos and his son were indicted on federal corruption charges. In June, State Comptroller Thomas DiNapoli released a report that indicated the Nassau Industrial Development Agency skirts the law and gives away the store to the politically connected. In July, acting Nassau District Attorney Madeline Singas issued a report that concluded the county's contracting process was ripe for corruption because it was not insulated "from improper influence, manipulation, collusion and fraud." And this month, Newsday reported that some of County Executive Edward Mangano's personal travel was arranged and paid for by a local businessman.
If these revelations were not bad enough, the county's fiscal health continues to deteriorate. Revenues for fiscal year 2015 were overestimated, and millions won't materialize. For example:
A planned county property tax increase was rejected ($25 million).
The county school zone camera program was repealed ($30.7 million).
A proposed video-lottery casino was rejected ($9 million).
Sales tax projections were off ($30 million).
Due to the never-ending fiscal follies, Nassau's budget deficits under generally accepted accounting principles (GAAP) are projected to be $174 million in 2015, $241 million in 2016, $283 million in 2017 and $311 million in 2018.
What's more, there has been little improvement in county finances since the Nassau Interim Finance Authority declared a control period as required by state law in January 2011. If the county had stuck to the compromise agreement it reached with NIFA, it would have reached a GAAP balanced budget this year and controls would have been lifted shortly thereafter.
Instead, county officials broke their 2012 promise to obtain recurring cuts totaling $150 million annually. They gave lucrative raises to favored employees, were disingenuous and deceptive as to the savings from the 2014 deal with the unions, and have accumulated hundreds of millions of dollars in unsettled challenges on commercial property tax assessments.
Next month, the county must submit to NIFA its 2016-19 financial plan that will most likely contain, once again, overly optimistic gap-closing measures.
NIFA, which on Wednesday said it would not allow the county to borrow to pay for termination pay, should no longer tolerate delusional budgets and forecasts. It must do more than sound the fiscal crisis alarm. It's time for members of the control board to use their broad powers to impose fiscal discipline and force the county on the road to recovery.
Here are two suggestions:
NIFA should hire an inspector general who reports to the board. The IG, which could be an individual with a staff or an outside firm, should be authorized to fix the county's porous contracting process, to make sure potential vendors are credible and viable, and to expose any corruption.
NIFA should get a team of independent financial experts to review all county operations and impose cuts, efficiencies and savings. With that information, NIFA could exercise its option to make changes to the multiyear operating plan, once it rejects what comes its way from the county executive and legislature.
If Nassau is to avoid insolvency and if taxpayers are not to be stuck with the bill for spending and borrowing that has grown at unsustainable rates, NIFA must act now.
George J. Marlin was a member of the Nassau Interim Finance Authority from 2010-14.