Red-ink alarms in Nassau

The political and leadership challenges facing Nassau County were evident last week as the legislature, in the first of its hearings on County Executive Edward Mangano's proposed 2012 budget, fretted that spending cutbacks might cause too much pain. Down the road, the state fiscal control board monitoring the county was shredding the very same document as not painful enough.

This financial crisis will not be resolved until the county's elected leaders first acknowledge its dire fiscal choices. (One tip, do not try to spend $8 million for artificial turf on county ballfields.)

Then the control board, Mangano, legislative leaders and the heads of the public employee unions must hammer out ways to close the budget gap. The unions are understandably unwilling to make concessions until they know a comprehensive plan is in place.

Until then, the Nassau Interim Finance Authority has no choice but to take a sharp red pen to Mangano's proposed budget, exposing phantom revenue and cuts. NIFA calculates a $153-million deficit for 2011. For 2012, after disallowing much of the county's financial legerdemain, NIFA found the budget $283 million in the red.

One of Mangano's fantasies was counting $69 million in union givebacks while hoping to pass a local law that would allow Nassau to reopen collective bargaining agreements. Not only is the validity of such a law more magical thinking from the county attorney's office, but legislators -- even some in the Republican majority -- are balking at voting for it.

So how does this standoff play out? Raising revenue through increased taxation isn't a political reality. Presiding Officer Peter Schmitt (R-Massapequa) and most legislators are adamant about not hiking property taxes during a recession. And Mangano has finally been disabused of the notion that Albany will give him an increase in the local sales tax.

Compounding this is the legal reality that the law governing NIFA doesn't allow it to act until the legislature approves a budget, which the county charter requires by Oct. 30. But the control board's high-pitched warning not to enact Mangano's 2012 budget unless the legislature finds a way to close the $283-million gap it identified will most likely be ignored by legislators seeking re-election on Nov. 8.

And NIFA has made pretty clear that it would formally reject this budget. Unless Mangano finds a winning lottery ticket, this wrangling won't be resolved before the county must do its short-term December borrowing for cash flow. With a current deficit and a projected one, NIFA chairman Ronald Stack warned that the control board's approval of that borrowing is "extraordinarily problematic."

The only realistic solution is compromise and negotiation. And that requires all the players to start talking.