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Editorial: Yet another episode of Nassau financial follies

Nassau County Executive Thomas S. Gulotta, right, speaks

Nassau County Executive Thomas S. Gulotta, right, speaks at a news conference. Credit: Newsday, 2000 / Karen Wiles Stabile

It's a classic illustration about fast-money fixes in Nassau County: 17 years after then-Executive Thomas Gulotta did a deal with the Metropolitan Transportation Authority to raise fast cash, the mess is still costing taxpayers. Now the county has to come up with $26 million, and the timing couldn't be worse.

In 1996, Gulotta, desperate for cash to keep one of the richest counties in the nation limping along and paying its bills, made an odd deal with the MTA: The agency would give the county $51 million in cash, and in return Nassau would pay the MTA $102 million over several years, all of it to be used for MTA capital projects that benefited Nassau County.

Nassau got the $51 million, issued bonds for the $102 million . . . and then didn't repay the MTA all the money it had borrowed to do so. Nassau kept $13 million of the cash, paying off only $89 million.

The county stopped making payments to the MTA in 2001, still on Gulotta's watch, when then-county Comptroller Fred Parola filed a lawsuit claiming the deal was illegal and unenforceable -- claims the county didn't mention when it first took the $51 million. Then in 2007, under County Executive Thomas Suozzi, the county used the money to pay down debt, which the MTA later argued should have been held in trust. Now after a long legal battle, the state's top court has ruled once and for all: Nassau has to pay the $13 million it has owed all along, plus another $13 million that will go to interest and additional capital projects.

Taking the money was shortsighted on Gulotta's part, as was refusing to pay the MTA. Continuing the battle, and spending the money borrowed to repay the MTA, was a mistake by Suozzi.

County Executive Edward Mangano unfortunately wasn't able to resolve the dispute, which intensified as he moved to privatize Long Island Bus. The county continues to have serious financial problems. The lesson here: Quick fixes and one-shot deals do more, in the long run, to haunt than help.