Written by Matthew A. Piacentini Friday, 16 December 2011 00:00
Nassau County, this past week, was facing the reality of a government shutdown until the fiscal control board NIFA voted to approve County Executive Edward P. Mangano’s $2.6 billion 2012 budget and multi-year financial plan. In approving the plans, NIFA moved to remain in control of Nassau finances through 2015.
Chairman of the NIFA Board of Directors Ronald Stack said during the Dec. 8 vote: “The plan is far from ideal… this plan holds significant risks… but although far from perfect, rejection of the plan at this moment could result in significant disruption in the county, a possible closing of the capital markets to the county… and a possible shut down of county government.”
One NIFA director, George Marlin, while voting for the plan, put in harsh words an explanation for his vote: “However disturbed I am at the plan that the county has put before us today, and however skeptical I remain about its willingness to affect the measures necessary to effect fiscal change… if the board chooses to reject the plan, the county could not go to the capital markets and borrow the cash necessary for ongoing operations. In a word, the county would be closed.”
Along this line of thinking, five NIFA directors voted in favor of the Mangano’s plan, with two voting NO. The board was clear that there would be significant review of specific county plans before important actions like big borrowing could take place.
Marlin summed up the borrowing that will be scrutinized as the county moves forward: “$305 million of new Tax Certs borrowing; $64 million in judgments and settlement borrowing and $80 million of borrowing for termination pay. The county, which assumes business as usual, also wants to issue Capital Project bonds totaling $564 million. (Reminder: During New York City’s fiscal crisis, Capital Project spending came to a halt.)”
The county plan also requires $150 million in union givebacks or cuts in the operating budget totaling $150 million. The CSEA and PBA, the two major employee unions, have said the concessions Mangano is seeking to avoid layoffs are not likely to happen.
So, the task at hand for the county begins with finalizing a deal with the labor groups or beginning difficult cuts. Nonetheless, after the NIFA vote, the county executive said, “The approval of this budget plan, developed by the county in consultation with NIFA, will put Nassau on the road to recovery. We have mapped out a plan, which requires bipartisan support of the Nassau County Legislature, to address Nassau’s fiscal instability now and for years to come.”