County Executive Thomas Gulotta's fiscal year 2000 budget proposal came under close scrutiny from top Republican and Democratic officials alike last week, after he unveiled a plan that uses a property tax increase and tobacco settlement money to close Nassau's over-$100 million dollar deficit.

Although Gulotta touted the plan - revealed through a press release and summary data on Sept. 15 - as one that freezes general property taxes, and cuts the salaries of top-level administrative officials, it also raises the police tax by $61 for each homeowner in the police district. And, it uses $275 million of the county's share of settlement funds from a federal tobacco company lawsuit to help eliminate the 1999 deficit and help reduce debt service costs in the future. The $2.159-billion budget plan increases spending by about 2 percent.

Nassau Comptroller Fred Parola, a Republican colleague of Gulotta's, is among those who expressed dissatisfaction with the county executive's plan, and concern about the effect it could have on the county's bond rating.

"It is evident, based on the county executive's press release and other summary data, that this is another disingenuous financial document," Parola said. "The administration's decision to dramatically increase the amount of tobacco settlement proceeds that it will securitize, and the move to create one 'omnibus general fund' point to a lack of structural reform and budgetary integrity."

Parola noted that Gulotta increased the amount of the tobacco money it would use in the 1999 budget from $170 million to $275 million, and that this directly contravenes the warnings of bond rating agencies. He added that the securitization of the funds, a process by which the county will borrow money against the funds that are expected to come in, is a mechanism that enables the county executive to defer responsible, tough budgetary decisions. The comptroller opposes the creation of one omnibus general fund, he said, because the lumping of various funds together eliminates accountability on the part of the various departments.

Other aspects of Gulotta's budget proposal include public employees' salary cuts and concessions, departmental consolidations and mergers, and some assessment reforms.

Cost cutting measures in the area of personnel include the following:

-reduce the salaries of all non-union personnel and top-level administrative officials by 9 percent (cutting salaries 5 percent and taking back a 4 percent pay hike scheduled to take effect Jan. 1, 2000 for all non-union employees)

- a 5 percent pay cut for the county executive, Clerk Karen Murphy, Comptroller Fred Parola, and Chairman of the Board of Assessors Charles O'Shea.

-elimination of future accumulation of compensatory time, which is time off in lieu of pay earned by working overtime, for non-union workers.

-reduction in accumulation of vacation and sick days for incoming non-union workers.

-the administration has negotiated the implementation of 12 furlough days a year for CSEA union public employees.

-the elimination of a holiday, the reduction of overtime costs, civilianization, and implementation of payback time has been negotiated with the Police Benevolent Association (PBA).

- implementation of early retirement incentives.

Department consolidations were outlined by Gulotta as follows:

-eliminate the Department of General Services, which provides general building maintenance, by merging its functions into the Department of Parks and Recreation.

-merge Purchasing, which currently functions as a Division of the Department of General Services, with the Office of the Treasurer.

-consolidate the Department of Commerce and Industry, which the county executive said "serves a dual function with the Nassau County Planning Department."

-merge Affirmative Action with the Office of Minority Affairs.

Assessment reforms outlined by Gulotta, which are intended to reduce costs associated with the property tax grievance process, include funding for a full-time Board of Assessment Review, expansion of the County Attorney's Office Tax Certiorari Bureau, and funding for a panel, formed by Chairman of Board of Assessors Charles O'Shea, to review the current assessment system and recommend changes to correct inequities.

"As I have repeatedly said, I am determined to take whatever steps may be necessary to protect the interests of our taxpayers by eliminating the budgetary shortfall and ensuring the county's fiscal integrity," said Gulotta.

Parola said the county needs more sweeping reform in the way it handles property tax grievances than outlined in Gulotta's budget plan, because the process of giving tax refunds to property owners whose property is overassessed costs the county hundreds of millions of dollars. He recommended the creation of Tax Review Commission, providing the Tax Certiorari Bureau of the County Attorney's Office with expert resources, and a closer look at the county's scope of liability for other jurisdictions in the tax certiorari awards.

Legislator Judy Jacobs (D, 16th L.D.), minority leader of the legislature, criticized Gulotta's proposal for not cutting what she feels are patronage jobs and other unnecessary expenditures, as the Democrats had recommended, and instead increasing taxes to plug the deficit.

"We're in process of going over it with a fine tooth comb right now, but essentially, it looks to us like it's a tax increase budget," she said, speaking for Democratic legislators, adding that about 60 percent of the revenue to close the deficit is coming from tax increases - through a combination of both the recently enacted and unpopular real estate transfer tax, and the increase in the police district tax.

"We feel it's imperative that he look at patronage positions, and see where cuts can possibly be made," she said. "We're also concerned that if these consolidations he's talking about are such a great idea right now, why in the world this wasn't looked at prior to this is amazing to us. What took him so long?"

Asked whether Democrats were willing to increase general property taxes to eliminate the deficit, Jacobs responded, "It is the source of last resort for anybody. This county pays very high taxes. And somehow these high taxes have not resulted in the county being in the black in a time when every other county is." She added, "I would have to see some true structural changes being implemented in Nassau County for me to ever say that that would be done. I don't see anyone willing to tackle the patronage and the waste in government that's here. I would have to see a legitimate attack on that to then even give consideration to any more property tax increases."

The minority leader added that the Democrats are currently working on a point-by-point plan for addressing the flaws of the budget, and that they have indicated to the Republican legislators that they want to work together to come up with solutions.

Legislator Bruce Blakeman (R, 7th L.D.), presiding officer of the Nassau County Legislature, said that fiscal consultants are currently reviewing the budget to see if it meets the guidelines set down by the Republican majority legislators in their Republican Deficit Elimination Plan proposed a few weeks ago. That plan called for $40 million in spending cuts, including 10 percent cuts in personal services and legal contracts, and 5 percent salary reductions for department heads and elected officials, including the legislators. "We're just trying to understand the document, and find out what cuts have been made, if they're real cuts, and whether or not the county executive has gone far enough to turn the deficit around," he said.

Asked if the Republican legislators would be willing to increase general property taxes to eliminate the budget shortfall, Blakeman replied, "I don't think you can isolate one area of the budget, whether it be revenues or expenditures. I think the Republican legislators are going to adopt a budget that is fiscally sound, that is conservative, that is balanced, and one which will eliminate the deficit and restore confidence both in the public and on Wall Street in the county's fiscal picture." He added, "So we will do what's necessary to produce a balanced, lean, conservative, and fiscally responsible budget."

Beginning Monday, the Legislature will hold four committee meetings to examine the budget - in the areas of Public Safety, Public Health, Capital Projects and Finance. Full legislative hearings will follow. The legislature's deadline for approving a final budget is Oct. 30.