The time for whining is over in Nassau – By George J. Marlin
The following appears in the July 27-August 2, 2012 issue of the Long Island Business News:
After weeks of procrastinating, Nassau County Comptroller George Maragos has finally confirmed that the county incurred a cash deficit of $50.4 million and a generally accepted accounting principles, or GAAP, deficit of $173.4 million for the year that ended Dec. 31, 2011. (These deficits would have been $30 million higher if the Nassau Interim Finance Authority had not ordered a wage freeze.) He also announced a “deficit of approximately $45 million is projected for a year-end fiscal 2012 unless immediate steps are taken to end in balance.”
Back in September 2010, when NIFA announced that the county’s proposed 2011 budget and its multiyear financial plan did not “meet the standards of prudence necessary for us to project balance at this time,” the county dismissed this assessment, insisting its budget was balanced.
Time and again, Nassau argued that the 2011 budget “was definitely balanced.” Even after NIFA declared a control period on Jan. 26, 2011, the Wall Street Journal reported “Mr. Mangano insists the budget is balanced and has said NIFA is requiring him to come up with unnecessary contingency plans.”
As late as August 2011, the county was still maintaining that its 2011 budget was balanced. Nassau’s chief financial officer, Tim Sullivan, told the county Legislature that it will have a balanced budget. “I know the budget is balanced when a Big Four audit company signs off on it.”
It is now official: Nassau’s budget prognostications were wrong, and NIFA’s deficit analysis released in January 2011 was pretty much on the mark. NIFA had projected a GAAP deficit of $155.5 million and a cash deficit of $53.4 million.
Why was the county’s 2011 budget a fiscal disaster? Many of its revenue and expense estimates were delusional:
And let’s not forget the $61 million in labor contract savings that never materialized.
The unaudited actual budget results and the revenue and expense variances confirm that NIFA had a statutory obligation to declare a control period in January 2011 because there existed a substantial likelihood of the county incurring a major operating funds deficit of 1 percent or more in the aggregate results of operations during its fiscal year 2011.
Nassau has squandered the past 19 months denying inconvenient facts, promoting a $400 million Coliseum referendum the voters had the good sense to overwhelmingly reject, seeking irresponsible Albany bailouts and pursuing dangerous one-shot revenue proposals.
The time for scheming, whining and finger-pointing is over. The time to govern is at hand. The county executive must be responsible and take the necessary corrective actions to restore fiscal integrity. It will mean making difficult and unpopular decisions. Such, however, is the price for holding executive office.Explore posts in the same categories: Articles/Essays/Op-Ed