Nassau: The Fiscal Shenanigans Go On – By George J. Marlin
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.Explore posts in the same categories: Articles/Essays/Op-Ed