Nassau County and the Town of Hempstead are in a state of moderate fiscal stress, the state’s second-highest fiscal stress rating, according to a report by New York state Comptroller Thomas DiNapoli.
DiNapoli’s Fiscal Stress Monitoring System evaluated 1,043 state communities based on 2015 information that they provided to the state in August. Nassau County and the Town of Hempstead were two of 18 communities listed as being in ‘moderate’ financial stress.
According to the report, the town has been in moderate fiscal stress since 2013. Meanwhile, the county was listed as being in significant financial stress in 2014 and moderate financial stress in 2013.
According to the findings, the county did not have a deficit last year, as it had gross revenue of more than $2.5 billion and gross expenditures of roughly $2.3 billion. Half of the report’s stress evaluation, however, was determined by fund balance –– the rainy-day fund –– and when it falls below 10 percent of gross expenditures, that’s a mark against a government.
The county’s fund balance last year was $120 million, or 5.1 percent of its gross expenditures. As a result, the county received the highest stress rating in this area, and study researchers anticipate the county’s fiscal stress level will remain unchanged in 2016, based on its three-year history. Other counties throughout the state averaged a fund balance of 22.4 percent of gross expenditures.
Nassau has “improved from significant [72.5 percent] fiscal stress to moderate [62.5 percent] fiscal stress,” Ed Naughton, the deputy county executive for finance, said in a written statement. “Our score would be better if not for the unfair burden that Nassau County has due to the guaranty for tax [certiorari],” or challenges to homeowners’ property-tax assessments.
Hempstead is currently in court with the county over a $30 million tax refund dispute. The town has been withholding property-tax payments to the county because, it argues, the county owes the town millions that it has paid to utility companies in property-tax refunds over several decades.
Last year Hempstead had gross expenditures of a little more than $164 million and gross revenues of about $291 million. It, however, had a fund balance deficit of $2.6 million, or 1.6 percent of gross expenditures. Its stress level is also predicted to remain unchanged.
“Local governments’ year-end fund balance deals with unanticipated revenue shortfalls, and a negative fund balance can impact a government’s ability to provide services moving forward,” Brian Butry, a spokesman in DiNapoli’s office, said. “When are you look at governments that have consistently been in stress, there are likely some reasons as to why, and the challenges are going to certainly be more difficult to overcome.”
Mike Deery, the town communications director, said in a written statement that Town Supervisor Anthony Santino’s 2017 budget proposal reduces expenditures by $13 million and salaries by $19 million. “At the same time, Supervisor Santino is producing the town’s first structurally balanced budget in approximately three decades, whereby recurring annual revenues are equal to expenses,” Deery said.
Valley Stream was the only village in the Heralds’ coverage area to receive a stress rating, and was labeled “susceptible” to financial stress. According to the report, the village will reach a much higher fiscal stress level in 2016, based on a three-year trend. Valley Stream was one of only 30 governments throughout the state in this category. The report also stated that the village experienced a 6.4 percent decrease in its real-estate value over the past four years.
The villages of Lawrence and Island Park did not file financials with the state comptroller’s office, the report said, and Lawrence is listed as being a ‘persistent non-filer.”
The report has three fiscal stress categories: significant, moderate and susceptible to fiscal stress. Ninety-six percent of governments that filed financial documents with the state are not in financial stress.
“We anticipate that local officials will look at these scores and make a determination as to where finances should go moving forward,” said Butry.