Nassau: The Fiscal Shenanigans Go On – By George J. Marlin

Posted April 14, 2014 by streetcornerconservative
Categories: Articles/Essays/Op-Ed

The following appears in the April 11-17, 2014 issue of the Long Island Business News:

On Jan. 26, Nassau County marked the third anniversary of the day directors of the Nassau Interim Finance Authority voted unanimously to declare a control period, as required by state law, because it was determined that “a major operating funds deficit of 1 percent or more, … assuming all revenues and expenditures are reported in accordance with generally accepted accounting principles,” was haunting the county’s finances.

NIFA had to impose controls because Nassau had not adequately addressed the fiscal deficit it inherited; had failed to declare a fiscal emergency or implement a plan of shared sacrifice; and had approved a budget that had a projected GAAP deficit of more than $120 million.

Nassau began its fourth year under a control period still in denial. The county has refused to come to grips with the fact that its budgets in 2011, 2012, 2013 have been woefully out of balance, despite the wage freeze that NIFA has imposed.

A crisis of confidence in the county’s fiscal management continues because it refuses to halt illusory budgeting practices. It’s still juggling money to keep on the budgetary lid, still failing to manage fiscal realities or to actually govern.

Time and again, county officials have lied about Nassau’s fiscal condition. In August 2011, for instance, one newspaper reported that Deputy County Executive of Finance Tim Sullivan told the Nassau Legislature that the county will have a balanced budget in 2011 – and if [NIFA] continues to say otherwise, Sullivan said, the state oversight authority should tell the county how to bring it into balance.

“I know the budget is balanced when a big four audit company signs off on it,” Sullivan reportedly said.

The county ended fiscal year 2011 with a GAAP deficit of $173.4 million.

In December of that year, NIFA directors approved a 2012-2015 fiscal plan that included $449 million in borrowing to pay tax cert judgments, county settlements and termination pay. In return for imposing another multi-generational backdoor tax increase, the county pledged to obtain $150 million of union givebacks or other recurring cuts totaling $150 million; to fully fund with operating revenue all tax certs, judgments and settlements and termination expenses beginning in 2015; and to have a GAAP-balanced budget in 2015.

To date, the county has failed to meet these conditions. Blatantly so, in fact, and without remorse or explanations.

Now, NIFA staff analyses project deficits of $157 million in fiscal year 2015, $190 million in 2016 and $235 million in 2017.

And now we get NIFA Chairman Jon Kaiman’s bogus union deal, which if approved would lift the wage freeze. The claim that this deal is cost-neutral is false.

An analysis released April 4 by the county’s independent fiscal watchdog concluded the new labor amendments would cost Nassau somewhere between $120 million to $292 million.

NIFA member Chris Wright said the report confirms that Nassau “does not have the revenue to pay for the contracts.” The report is “credible, objective and hopefully sobering for those people who are high on the fumes of short-term political gain,” Wright declared.

NIFA lost its objectivity concerning union proposals the day Kaiman became the county’s chief negotiator. And if the NIFA board discards its fiduciary responsibilities and approves this bogus union deal, it will destroy its integrity and purpose for being. NIFA will become a shell of its former self and the county, at some point in the near future, will become insolvent.

Nassau’s fiscal crisis is the direct result of mismanagement, extravagance and political cowardice. And if the bogus union deal is approved, county officials will once again be rewarded for their failures – and county taxpayers will be stuck footing the bill for NIFA negligence for decades to come.

Andrew Cuomo, the Catholic Anti-Catholic – By George J. Marlin

Posted April 9, 2014 by streetcornerconservative
Categories: The Catholic Thing

This article I wrote appeared on The Catholic Thing web site on April 9, 2014.

Can a ne’er-do-well get Bishop re-elected? – By George J. Marlin

Posted April 1, 2014 by streetcornerconservative
Categories: Articles/Essays/Op-Ed

The following appears in the March 28-April 3, 2014 issue of the Long Island Business News:

For decades, New York’s 1st Congressional District, which encompasses the East End of Long Island, has been viewed by political analysts as a highly competitive “swing” district.

In the 1950s, the district was reliably Republican. But in 1960, Democrat Otis Pike, who lost his first run for the seat in 1958, won a rematch with 50.4 percent of votes cast. Pike went on to win eight more times, garnering on average about 52 percent of the vote in each election.

When Pike retired in 1978, the district was captured by William Carney, a registered Conservative who had also received the nomination of the Republican Party. Carney stepped down in 1986 and was succeeded by Democrat George Hochbrueckner, who lost in the 1994 GOP sweep to Michael Forbes.

Forbes switched to the Democratic Party in July 1999 and went on to lose the Democratic primary in 2000. Republican Felix Grucci retained the seat, but went down in 2002 to Tim Bishop, who squeezed in by 1 percent.

Since then, Bishop has managed to be re-elected by narrow margins in hotly contested and well-financed races.

This year, Bishop is on the GOP hit list because of the Independent Office of Congressional Ethics finding that there’s “substantive reason” to believe the congressman violated the law when he sought a donation from a Sagaponack resident while assisting that person in getting a fireworks permit.

The obvious candidate to knock off Bishop is State Sen. Lee Zeldin. He cut his political teeth running unsuccessfully for the 1st district seat in 2008, then bounced back in 2010 to win the state Senate seat. He was easily re-elected in 2012.

Zeldin has an impressive résumé. A Suffolk County native, he passed the bar exam at 23 and went on to serve four years active duty in the U.S. Army. He was a member of the 82nd Airborne Division that was deployed to Iraq during Operation Iraq Freedom. Today, he holds the rank of major in the Army Reserves.

Unfortunately, Zeldin faces a GOP primary and must expend financial resources to fend off opponent George Demos.

Demos, who entered the primary in 2012 then abruptly dropped out, is a former SEC lawyer who apparently married into a wealthy family and has been living the life of a ne’er-do-well. Federal financial disclosure records reveal that since he married Chrysa Tsakopoulos, his personal assets have increased from $365,000 to about $5 million. This is interesting, considering he declared that he had zero salary income in 2012 and 2013.

More interesting is his campaign war chest. Demos loaned his campaign $2 million and, according to recent federal filings, of the $201,000 he has additionally raised, 73 percent ($147,000) came from 96 California residents – a vast majority of whom have previously given to Democratic candidates. Demos only raised $4,300 on Long Island.

Why California? Demos’ father-in-law, Angelo Tsakopoulos, is a major California Democrat fundraiser and supporter of President Barack Obama. Demos’ sister-in-law, Eleni Tsakopoulos Kounalakis, a buddy of Nancy Pelosi, became Obama’s ambassador to Hungry in 2010.

Dark blue California Democrats giving contributions to an East Coast Republican? Well, it wouldn’t be the first time Democrats gave money to a weak Republican to help re-elect a Democrat.

I, for one, am tired of rich guys who actually earned their money telling us we need them in public life. But a guy living off the largesse of others? No, that’s not for me. And hopefully it’s not for Republicans and Conservatives in the 1st district.

Residents in eastern Long Island need a representative in Washington who has worked hard to earn their respect and votes. That’s Lee Zeldin.

The Nassau County Mangano-Kaiman Watch, March 29, 2014 – By George J. Marlin

Posted March 29, 2014 by streetcornerconservative
Categories: The Nassau County Mangano-Kaiman Watch

The Bogus Kaiman Union Deal:

Collapsing Under Its Own Weight

As “The Watch” predicted, the plan to railroad approval of the bogus Kaiman Union Deal through the County Legislature and the NIFA board—without proper vetting and financial analysis—on Monday, March 31, 2014 has collapsed. The NIFA meeting schedule for that night has been canceled.

The plot failed for several reasons:

  • Many County Legislators made it clear that they would not act until they received from Maurice Chalmers at the Office of Legislative Budget Review (OLBR) an analysis of the proposal;
  • Kaiman finally relented and NIFA consulted qualified outside labor lawyers. The lawyers had problems with the pension clause that “would require that new employees go to a Tier 6 pension level that would require increased employee contributions.” Apparently, it may not be legal to negotiate pension contributions in an existing contract. In Kaiman’s desperate rush to get a deal done to promote his languishing political career, he agreed to concessions that union lawyers had to know were bogus. (Union lawyers, who took Kaiman to the cleaners, must have had trouble keeping straight faces during the Kaiman negotiations. It’s easy to see how this would have unfolded, with a new employee suing—and winning—perhaps a year from now, and unraveling the savings from the pension system.)  It’s also important to note that the savings from lower pension costs are a key and significant component of the deal—a deal which already falls at least $150 million short of the mark even if everything in it works out.

Word is that the outside labor lawyers have pointed out that there are a number other financial and legal flaws in the Kaiman Union Deal.

Kaiman’s failure to do his homework before announcing an agreement nearly a month ago reminds one of Nancy Pelosi’s comment on Obamacare: “We have to pass the bill so that you can find out what is in it.” Fortunately, unlike Obamacare, we are learning bit by bit what a disaster the Kaiman Union Deal is before passage.

Also predicted by “The Watch,” Kaiman’s board approval deadline date of March 31, 2014 proved to be a false one. A state judge has extended for two weeks the start of a new police class, and it has been revealed that the County could seek the judge’s permission to continue using the expired police test results.

As of today, the OLBR has not received the backup information needed to properly analyze the financial impact of the Kaiman Union Deal. Why so? Because a genuine analysis would reveal that the Kaiman Union Deal is not cost neutral but will be $150 million or more short of that goal. This may explain why it is rumored that Nassau County’s Chief Financial Officer refuses to testify that the Kaiman Union Deal is cost neutral before the County Legislature.

This is precisely what happens when the chairman of a financial control board which is supposed to be impartial becomes the chief negotiator. All objectivity is lost, the details don’t matter and getting any deal done becomes more important than getting a good deal done.  It becomes not the County’s deal but “NIFA’s deal”—and NIFA’s board members should be wary of being associated with such a disaster-in-the-making. Hopefully those NIFA board members who were prepared to approve the Kaiman Union Deal have realized they have been had—and decide not to let it happen again.

Don’t count Astorino out in governor’s race – By George J. Marlin

Posted March 20, 2014 by streetcornerconservative
Categories: Articles/Essays/Op-Ed

The following appears in the March 14-20, 2014 issue of the Long Island Business News:

Many political wags are dismissing the gubernatorial candidacy of Westchester County Executive Rob Astorino – who on March 5 announced  his intention to win the Republican and Conservative party nominations – and that’s a grave mistake.

Astorino has had a remarkable political career thus far and has proven to be not only a fine campaigner, but a remarkably competent and principled government executive.

Back in 1991, he entered a race for the Mt. Pleasant Town Council that was considered hopeless, and beat an entrenched incumbent. He was reelected in 1995 and 1999 and in 2003 entered another tough race, this time winning a seat in the Westchester County Legislature.

Two years later, he took on two-term County Executive Andy Spano, arguing that Spano’s policies would drive Westchester government to the edge of the fiscal abyss. Astorino lost that one – but then his fiscal predictions came to pass, and he beat Democrat Spano in a 2009 rematch with 52.5 percent of the vote.

As county executive, unlike many other elected officials, Astorino was willing to govern. He made tough decisions, took on entrenched bureaucracies and unions and balanced county budgets without resorting to smoke and mirrors. He reduced taxes in 2011 and he kept them flat in 2012 and 2013, while preserving essential services.

Compare his record with his hapless Nassau County counterpart, Ed Mangano, who’s refused to govern, failed to balance budgets and, because of his fiscal incompetence, languished under the control of a state-appointed finance board for over three years.

As a result of Astorino’s successes, last November he was reelected – 56 percent to 44 percent – in a county with a 2-1 registered Democratic edge. He proved that if one has the guts to govern, one can confound the naysayers and beat the permanent government crowd.

So Astorino should not be counted out this fall. He runs a tenacious campaign and can articulate and expose New York’s fiscal, economic and cultural woes. He will also unite and bring out in force upstate pro-fracking and pro-gun voters and frustrated suburbanites.

Despite all of Gov. Andrew Cuomo’s rosy rhetoric, New York still has the highest combined taxes in the nation, the most debt as a percent of income and the worst state business tax climate in the country – and it’s the worst state on the U.S. Economic Freedom Index.

In addition, Cuomo broke his solemn pledge and raised state income taxes, and his 2013-14 budget was balanced with over $1 billion dollars in one-shot revenues, backdoor borrowing gimmicks and overly optimistic revenue estimates.

Cuomo’s vulnerability was revealed in a March 5 NBC/Wall Street Journal/Marist College poll that indicated his job performance rating has dipped 10 percentage points since November. Now at 42 percent, Cuomo’s job approval is the lowest it’s been since he took office in January 2011.

What’s hurting Cuomo is the negative outlook New Yorkers have about the state economy. A year ago, 58 percent believed the state was in an economic recession; today that number stands at 65 percent. Also, only 45 percent believe Cuomo is having a positive impact on the Empire State.

These are not numbers an incumbent can boast about nine months before a gubernatorial election.

At the moment, Astorino is an underdog in the race against Cuomo. Nevertheless, his message that he’s “tired of listening to the fairytale that everything is just great when it’s just the opposite … tired of watching New York’s decline” may just strike a chord with millions of frustrated voters.

Expect Rob Astorino to give the governor a run for his money.

The Persecuted Church 2013 – By George J. Marlin

Posted March 19, 2014 by streetcornerconservative
Categories: The Catholic Thing

This article I wrote appeared on The Catholic Thing web site on March 19, 2014.

The Nassau County Mangano-Kaiman Watch, March 17, 2014 – By George J. Marlin

Posted March 17, 2014 by streetcornerconservative
Categories: Articles/Essays/Op-Ed, The Nassau County Mangano-Kaiman Watch

The Bogus Kaiman Deal

 Will NIFA Discard Its Fiduciary Obligations And Squander Its Integrity By Approving An Incredulous Deal That Lifts The Wage Freeze?

This past week will go down in NIFA annals as an extraordinary one.  Extraordinary in terms of deceitful tactics and illusory pronouncements employed to procure a bogus deal to lift a wage freeze in a way that puts County finances in further peril.

Let’s review:

Monday, March 10, 2014

The primary reason Chairman Kaiman called a board meeting was to force a vote on a “sense of the board” symbolic resolution that laid out conditions to lift a wage freeze (a wage freeze that nevertheless needed to be renewed that same day due to an impending deadline later in the week).  That resolution was based on verbal representations of what parties said would be in the agreements—not on documented evidence supporting a cost neutral or revenue-funded deal, on the fear of losing the suit challenging the legality of the wage freeze that was pending in the State Supreme Court and other intangibles.  Another reason for the Monday resolution:  Kaiman wanted a public pat on the head at Mangano’s State of the County address on Tuesday.

Director Chris Wright rightly opposed the Kaiman resolution citing the likely double counting of most or all of the “savings” from attrition.  Director Dermond Thomas opposed it, as well, citing his discomfort with the County’s continuation of the freeze without making progress on balancing the budget.

Attrition, while expressly not named in the budget, is what the County uses to cover excessive overtime and other unbudgeted costs such as those associated with harsh winter storms.  Stripped bare of that cushion, which is a commonly used budgetary technique to keep governments liquid in the face of surprises which always seem to occur, the County could run out of cash.

Double counting means that the estimates of $129 million of net costs from these deals which require funding in order to lift the freeze are more likely in the range of at least $250 million, and as much as $285 million.

Even at $129 million, the County proposes (without yet documenting its proposal), and NIFA appears ready to accept inflated projected revenues from anticipated Albany approval of additional speed cameras, that are treated as “new” revenues to help pay for the deal even though a portion are already included in the multi-year plan.  More double counting.

Tuesday, March 11, 2014

At Ed Mangano’s State of the County Address, Kaiman gets his public recognition.

In his speech, Mangano made this ridiculous comment:  “In 2012, the County reported a $27.5 million dollar surplus on a GAAP basis and continues to show improvement with respect to the NIFA statute test, which is even more conservative than the GAAP reporting standard.”

After 4 years in office, Mangano has not learned there is only one “GAAP” and those accounting principles applied to the County determined it incurred, in 2012, an $85.5 million deficit (triple the NIFA threshold for a control period).

The County’s audit, based on the County’s chosen “budgetary basis” of accounting, came up with a “surplus” due to the fact that it failed to pay some current bills in 2012 and paid others by borrowing money.  For example, $88 million in tax cert refunds were not paid in 2012 but were pushed into fiscal 2013.  Also, there was an unbudgeted use of $10 million in reserves in 2012 and the use of $67.8 million in long-term borrowing to pay current bills such as termination payments.  The County considers such borrowings to be “revenue” in its results, despite the fact that such treatment is at odds with both GAAP and specific provisions of the NIFA statute.

These practices are like using one’s credit card to make current mortgage payments on one’s home and then making minimum payments on the credit card balance for the next thirty years.  And then declaring the household budget “balanced.”

The County Executive’s other absurd boast is the “fund balance has increased 28% to $82 million.”  The fund balance did not increase because the County incurred a surplus; rather, it increased solely because it borrowed money.

Wednesday, March 12, 2014

Supreme Court Justice Arthur Diamond hands down an impeccably correct decision ruling that NIFA “did not exceed its authority to impose wage freezes in 2011, 2012, 2013.”  This decision is a major blow to the unions’ bargaining position.  This is one of the lawsuits of which the NIFA board was advised to believe it would lose.  Advised by those looking to make a deal—any deal—with the unions.  On the same day, the unions and the County filed agreements with the County Legislature which were at odds with what NIFA had been promised leading up to its Monday vote—the vote they took without the benefit of any documentation.  Thank heavens Monday’s vote wasn’t binding.

Thursday, March 13, 2014

Knowing the finance numbers don’t work, Kaiman attends a series of meetings with County and union officials where he acts as both a negotiator and a supplicant, acting as if he had no leverage and did not win a court case.  NIFA gives ground on a number of points, despite its court win.

Friday, March 14, 2014

More meetings.  It appeared as though Kaiman was headed toward appeasement and dereliction of duty.  What was a bad deal on Monday is a marginally worse deal on Friday, as more ground is given by the “winner”—something you wouldn’t see in any rational business deal.

Saturday, March 15, 2014

Kaiman, Mangano and union leaders announce a deal based on bogus numbers that if approved by the County Legislature, union members and NIFA will lift the Wage Freeze on thousands of unionized government workers.  The means to pay for these deals?  Nobody’s yet sure—they’re taking the County’s word for it for now.

* * * * *

Don’t expect the Bogus Deal to get to a NIFA vote until early April.  There is a false deadline of March 31 for the start of a new police class under the new arrangements, but this can be extended.  The Legislature will have to mull things over for a few weeks and, since it meets on Mondays, will likely consider the deals on March 31.  Many members—likely all nineteen—have asked Maurice Chalmers at the Office of Legislative Budget Review (OLBR) for analysis of the proposal.  (Chalmers is known as a first rate numbers guy who calls them as he sees them.)  Don’t be surprised if the OLBR determines that the negotiating parties will have to come up with $275 million or more—not $129 million.

At some point during this interim period, the NIFA board will realize that it’s not in on the joke—it is the joke.  It’s been said that a mind is a terrible thing to waste.  Well, a reputation—and NIFA had a good reputation, as did its individual members—is a terrible thing to waste, as well.  NIFA’s credibility is one of its prime assets.  Recent shenanigans represent a spend down of that asset.  That’s not good for NIFA or control boards around the State.


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