NIFA Rules Force $121M in Nassau Budget Cuts

Nassau County Executive Ed Mangano announced Wednesday that he would be making $121 million worth of cuts to his 2011 budget in response to the control period issued by the Nassau Interim Finance Authority (NIFA).

“This $121 (million) of it is painful, very painful,” Mangano said during a press conference at the county Legislative building, blaming the cuts on a change in NIFA’s accounting practices which “creates a paper projected deficit” of $176 million “that I must address with real cuts.”

When asked about the discrepancy between the cuts being made and NIFA’s numbers, the county executive said that “some of those dollars even by NIFA’s admission are less than $176 (million). Some of them are accounting in nature.”

The move comes following a supreme court judge’s ruling that the state fiscal watchdog can impose a control period on the county, but has not ruled on whether it was right to impose one at this current time. Mangano said that he “hasn’t made a decision” whether he will continue the trial or make an appeal.

NIFA’s accounting changes primarily ended the practice of counting borrowed funds to pay property tax settlements as revenue which had existed under previous administrations.

“We put forth a plan based on the rules that we took office in,” Mangano said. “The fix just got harder in the wake of these new accounting principals.”

The new rules also preclude the county from counting on 90 percent of the revenue generated from selling some of its properties in and around Mitchel Field. Only $3.7 million will be counted from the sale of those properties under the NIFA guidelines.

“It’s a shame NIFA had to direct the county executive to use real numbers. He should have done it from the beginning,” Legislative Minority Leader Diane Yatauro, D-Glen Cove, said in a statement.

“This derails my assessment reform plan that I put forth,” Mangano stated, saying it creates an additional $80 million cost to taxpayers in 2011. Last year the county legislature passed assessment reforms system which recognized the estimated $300 million in backlog and debt, but now Mangano said “we must now find a way to deal with those costs this year and every year as they occur.”

Mangano has vowed not to raise property taxes, which he estimates would have to be increased 21.5 percent in order to pay for the county’s shortfall as projected by NIFA.

“Although the county has a surplus and money in the bank, this accounting change results in a fabricated fiscal emergency that must be addressed in four days,” Mangano said. “It’s unfortunate, yet necessary in the face of NIFA’s decision.” It is estimated that the county has about $50 million in cash in its reserve accounts. “It does not count towards addressing this paper deficit,” the county executive said.

Calling it “a very draconian plan,” Mangano said that he would have to reduce the workforce by $60 million, and called on NIFA to stop scheduled wage increases for county workers. “Voluntary concessions could prevent some of the most draconian actions that I must take,” he said.

An additional $40 million in cuts would include $15 million in contractual expenses, $15 million in restructuring of the police department, $5 million in the county’s relationship with MTA and Long Island Bus and $4.5 million in reduction of healthcare.

Funding for the LI Bus is currently about $9 million and the MTA is requesting an additional $9 million that says it needs to maintain about half of the current bus routes.

“At this point on this mandate in the accounting rules, it doesn’t look like we’ll be able to meet their expectations,” Mangano said, acknowledging that there would almost now certainly be a move toward a privatization of the bus company.

The county executive intends to reveal details of his revised budget on Tuesday as well as a complete list of “temporary” cuts, which would be implemented on July 1 and savings based off of the later six months of the year. The cuts would affect “hundreds” of county employees and well as every single county department, some more than others.

“Services will be affected, contractual services will be slashed,” Mangano said. “We will be mindful of the health safety and welfare of our citizens first.”

When asked about the current contracts with county union employees, Mangano said that we believe during a control period we have the ability to layoff. There is now a control period, we will use that as a tool to meet the new rules.”