Governor George Pataki's long-awaited proposal to restore fiscal stability to Nassau County came earlier this week with the promise of financial assistance and the threat that if the county does not take immediate action to cut its budget it would lose control of its finances.

To keep pace with a budget deficit anticipated to grow to $321 million by 2003 the plan proposes $270 million in budget cuts over four years, in addition to cuts that have already been made, and coupled with a state aid package and a debt refinancing plan.

Included in Pataki's five point plan is the creation of the Nassau Interim Finance Authority (NIFA), which will be charged with refinancing the county's debt and providing oversight of the county's cost-cutting measures.

The plan calls for the immediate implementation of $50 million in recurring measures to close the budget gap and subsequent gap-closing actions equaling $70 million in each of the next three years. The first deadline for cuts corresponds with the June 30 deadline set by Wall Street credit agencies in which they would drop the county to junk bond status if clear action is not taken.

If NIFA signs off on the county's gap-closing measures the county will receive $100 million in assistance over the next five years from the state. In addition to this, the state will provide $5 million and technical assistance to establish a Certiorari SWAT team to tackle the county's $400 million backlog of property tax assessment appeals.

The plan also sets the groundwork for a hard control board should the county not take immediate steps to close the gap or establish a balanced four-year plan by Sept. 1. According to Pataki, a hard control board would effectively take away control of the county's finances from the local government. Pataki indicated that they are confident the county will move forward with gap closing measures.

"In the past there has been this inability to come to a consensus, but I think that once the roadmap is there, once the numbers are in place from a source that both parties feel is unimpeachable [Zarb] I think we will have the bipartisan will to move forward," said Pataki.

Pataki further stated that if the plan is enacted it will eliminate the need for for a large tax increase. "We have said plainly and unequivocally I believe that with this state's support there is no need for any tax increase...," said Pataki. "How they do that is up to the officials that have been elected in Nassau County."

The county will have to pass legislation to enact the plan, and preliminary responses to it were positive. County Executive Thomas Gulotta, Presiding Officer Judy Jacobs and Minority Leader Peter Schmitt each commended Pataki and Wall Street executive Frank Zarb, whose independent study and analysis of the county's finances supported the plan.

During a small press conference following the Pataki announcement, Gulotta termed the state plan as "perfect," and stated he was confident the county would be able to make the $270 million in cuts outlined in the plan.

"It gives us good solid help in meeting our obligations to getting Nassau County on sure footing but it does not remove from us the responsibility of good government and knowing what our responsibilities are," said Jacobs.

"I am very happy with the elements of the plan...," said Schmitt. "It would have been easy for the governor and everyone in the state to walk away and throw up their hands and say 'it is a local problem you guys deal with it.' The fact that they are coming in here, the state of New York is making a cash investment in Nassau county and giving us a roadmap on how to get out of this situation. It is very, very positive."

The NIFA board will consist of five members of which three will be selected by the governor and one each would be selected by the Senate majority leader and the speaker of the Assembly. Its active life will end when the county returns to fiscal stability.