NIFA rejects 2018 county budget

Control board will step in and make cuts if lawmakers fail to submit balanced plan by Nov. 27


The state board that oversees Nassau County's finances on Thursday night rejected the proposed $3 billion budget for 2018, deeming it unbalanced after the legislature axed $59 million in revenue-producing fee increases proposed by outgoing County Executive Ed Mangano.

The Nassau County Interim Finance Authority, in a resolution unanimously passed on Thursday, gave legislators until Nov. 27 to submit a budget that is balanced to the board's satisfaction.

The budget legislators submitted includes $108 million in risks for 2018, according to NIFA, and greater risks in each subsequent year of the multi-year financial plan.

In addition to several other issues with legislators' amendments, NIFA's directors said, the county cannot rely on $9.5 million of fund balance to pay for operating expenses — according to generally accepted accounting principles, the fund balance is not revenue.

Also, legislators were overly optimistic in estimating 2.5 percent growth in sales tax revenue, and $5 million savings on police overtime, according to NIFA.

“We acknowledge that the county’s elected officials have a right to govern and the prerogative to make policy decisions regarding how the county will raise and spend its operating revenue, as long as these decisions are consistent with the NIFA Act,” NIFA directors said. “However, we conclude that the 2018 Budget, as adopted by the legislature, lacks sufficient revenue to cover the approved level of spending, contains sizeable risks, and weakens an already fiscally-challenged plan.”

In their report, NIFA's directors went on to say that legislators should make $31.5 million in budget cuts to make up for the risky assumptions and revenue schemes they identified in the budget. NIFA's report framed the cuts as necessary to protect future generations of taxpayers from picking up the bill for current financial mismanagement.

“These ordered cuts, which can be in the form of credible and recurring expenditure reductions or revenue increases, will help to ensure that operations of the county will be conducted within the resources available and ensure that future generations will not inherit a disproportionate responsibility for the actions of the current generation,” NIFA's directors wrote.

Democratic and Republican legislators vowed at the last budget hearing that a number of controversial fee increases for real estate transactions and traffic tickets would stay out of the budget, and balancing the budget without them is likely to be difficult.

If legislators fail to balance the budget and submit it to NIFA by Nov. 27, the control board's directors said they could use their authority to step in and make their own cuts, declaring a “fiscal crisis” in Nassau County.