Written by Denise Nash Friday, 22 January 2010 00:00
Not even a week into his new term as County Executive, Ed Mangano received a letter from the Nassau County Interim Finance Authority (NIFA) questioning his plans for the county’s fiscal situation.
The letter, which is signed by Ronald Stack, NIFA’s chairman, states three concerns that NIFA has after hearing Mangano’s inaugural speech and public comments regarding his immediate plans for the county’s current financial situation.
The first concern that NIFA expressed in the letter was Mangano’s idea to repeal the energy tax effective later this year, which NIFA estimates will cost the county $20 million for the remainder of 2010 and more than $40 million on an annualized basis.
Mangano signed the repeal of the 2.5 percent sales tax on home energy sources like gas, propane and oil, a bill that was just recently passed by the Nassau County Legislature.
The repeal will go into effect after the winter heating bill months, in June, Mangano said earlier this week, which will allow some time for the county to find a way to deal with the resulting budgetary shortfall, which he also projected at $20 million for 2010.
The second concern raised in NIFA’s letter is in regard to the cigarette tax, a $2 per pack tax that Nassau County is encouraging New York State to pass. It was earlier estimated that this tax could bring in $20 million a year in revenue to the county, which would compensate the loss of the funds from the energy tax.
NIFA’s expressed concern that New York State would not pass the cigarette tax, which is currently part of the county’s multi-year financial plan. “We are concerned about the passage of the cigarette tax and believe a contingency for that expected revenue is appropriate,” Stack wrote in the letter.
The third concern mentioned in the letter is in regard to something that Mangano said in his inaugural speech in regard to the county’s deficit. “You mentioned in your speech that you saw a deficit in 2011 facing the County of Nassau to be nearing $400 million, which is higher than the current multi-year financial plan had forecast.”
Stack, in his letter, gave Mangano a 60-day period to provide “an amended multi-year financial plan that deals through specific actions how the county will handle the loss of the energy tax, the loss of the cigarette tax and your basis for estimating a $400 million gap in 2011 and the specific actions you plan to alleviate that deficit,” he wrote.
“Since Dec. 3, the day the county executive’s victory was certified, resolving the County’s fiscal turmoil and creating a multi-year plan has been a major focus of the Mangano administration, and so it remains,” said Michael Martino, press secretary for Ed Mangano. “ We look forward to subsequent meetings and working with NIFA to restore fiscal health to Nassau County. We were disappointed with NIFA’s attempt on the second day of our new administration to put unprecedented time constraints on the County, and note that setting the time frame for release of the plan remains the prerogative of the Administration. We look forward to subsequent meetings and working with NIFA to restore fiscal health to Nassau County.”
The letter was also sent to Nassau County Presiding Officer Peter Schmitt, minority leader Diane Yatauro, Nassau County Comptroller George Maragos as well as NIFA Directors.
“The NIFA letter demonstrates that chairman Ron Stack is extremely concerned about the pending budget gap once the repeal on the home energy tax sales tax extension has been implemented,” said Yatauro. “He is absolutely correct to request a modification to the county’s financial plan. We need to know the source of the needed revenue. Our caucus stands ready to work with the administration to develop viable solutions to this problem. Now is the time for us to work together to avoid a fiscal crisis.”
As of press time, Comptroller Maragos and his staff were still reviewing all of the information in Stack’s letter. During his campaign, Maragos said that the approval of the cigarette tax is critical to balancing the 2010 budget.
Schmitt did not have a comment regarding NIFA’s letter as of press time.
NIFA is a public benefit corporation of the State of New York created by the Nassau County Interim Finance Authority Act. The New York State Legislature created NIFA in June 2000 and they are governed by a seven member, non-partisan board appointed by the Governor, with one member recommended by the Senate Majority Leader, one by the Assembly Speaker, and one by the State Comptroller.
NIFA has certain powers under the Act to monitor and oversee the County’s finances. In addition, NIFA is empowered to issue its bonds and notes for various county purposes, including the restructuring of a portion of the county’s outstanding debt.