The following appeared on Monday, August 24, 2020 on The Island Now’s website:

When the Nassau Interim Finance Authority voted in January 2011 to impose a control period on the county government, the board chairman, Ronald Stack—an expert in municipal finance—had a plan in mind to get the county back on the path of fiscal righteousness.

The Stack plan, which included controls on spending and hiring, a wage freeze, and some tax-cert borrowing, was working, and the annual GAAP deficit was declining through 2013.

A wrench was thrown into the plan, however, when Stack’s successor, NIFA Chairman Jon Kaiman, negotiated a union wage deal in 2014 that was nothing more than blue smoke and mirrors. Kaiman’s claim that the deal was cost-neutral was false and based largely on expectations for the ill-fated and infamous county speed camera program.

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

The Kaiman deal caused the Nassau budget deficit to jump in 2015 to $189.2 million.

In later years, however, the county’s deficit began declining, thanks to NIFA’s insistence on fiscal discipline (including multiple rejections and revisions of county budgets) and a strong economy.

The county has reduced its dependency on borrowing for capital projects, employee termination payments, and legal judgments and settlements.

Sales tax and other key revenue streams had grown significantly and rising property values had stabilized property tax streams.

In fact, in fiscal 2019, the county incurred its first GAAP surplus, $76.8 million, in decades.

If that trend continued, NIFA might have lifted its controls in 2021.

But all bets are off due to the COVID-19 pandemic.

On August 18, NIFA issued its mid-year analysis of the county’s financial plan—and it is depressing reading.

NIFA projects that the $3.55 billion 2020 budget can incur a GAAP deficit to the tune of $334.2 million.

In the out years, the budgets are projected to have deficits of $481.4 million in 2021; $423.9 million in 2022; and in 2023, $436.3 million.

What’s driving these deficits?

The main culprit is the reduction in sales tax dollars due to Gov. Cuomo’s shutdown of the economy. In the second quarter, those revenues were down 24 percent compared to the same period in 2019. Sales tax revenues could be off as much as $237.8 million in 2020.

Proceeds from other income streams (i.e., Department Revenues, Fine and Forfeitures, OTB payments) are also taking hits due to lower transaction and economic activity.

NIFA estimates that total revenues could be off as much as $334.2 million by year end.

To address this crisis, NIFA Chairman Adam Barsky urged the county “to use the economic catastrophe as an opportunity to go beyond pre-existing geographic and political disagreements and examine all options, including those that might have been disregarded in more ‘normal times.’”

Many of the options available to elected officials can be found in the Grant-Thornton study commissioned by NIFA in 2011 to identify potential savings and cost-cutting opportunities valued at between $251 million and $319 million.

Since most of the recommendations have been ignored, the nine-year-old report is still relevant and its suggestions valuable.

The savings the county executive has proposed thus far don’t cut it. NIFA’s analysis reveals “almost 40 percent would not provide savings on a GAAP basis and more than 90 percent would be non-recurring.”

These gimmicks will not put the county on a firm, structural financial footing. They will only kick the fiscal can down the road.

To address the projected deficits in the coming years, NIFA recommends that the county “implement gap-closing initiatives in fiscal year 2020, which provide recurring revenues and savings beyond the current year; and pursu[e] productivity improvements through collective bargaining in order to control labor costs, which represent approximately half of total spending.”

Such measures and increasing sales tax receipts, due to a recovering economy, may significantly improve the county’s fiscal condition.

However, if the County refuses to deal with fiscal realities and employs fiscal sleight of hand schemes as the Republicans did back in the 1990s and during the corrupt Mangano administration, NIFA will have to step in and impose what Chairman Barsky has called “Draconian” spending cuts.

Barsky said the measures could include laying off as many as 2,900 employees or hiking county property taxes by up to 60 percent.

The time has come for the county to face reality and to implement a dramatic restructuring of its government operations.

And the road map can be found in the 300-page Grant-Thornton report, as well as a subsequent, shorter report commissioned by NIFA a few years ago.

Implementing its scores of recommendations could be the prescription to cure the ailing county government. NIFA can impose controls, but it can’t create political will—that’s up to the county’s elected officials.

The following appeared on August 10, 2020 on The Island Now’s website:

In early August, State Comptroller Thomas DiNapoli released a 43-page analysis of New York City’s economic and fiscal trends. His perceptive report should be read by every local official facing an operating budget deficit.

Here’s an overview of DiNapoli’s findings:

Two months after Gov. Cuomo ordered the shutdown of the New York City economy, 940,000 workers lost their jobs. The city’s unemployment rate, which hit an all-time low in February of 3.4%, had skyrocketed to 20.4 percent by June.

The hardest hit: bars, restaurants and hotels. That sector lost 304,000 jobs by the end of April.

Retail lost over 90,000 jobs.

Those sector losses explain why the highest unemployment is among minorities and young people living in the Bronx. Unemployment in that borough has hit 24.7 percent.

The DiNapoli report goes on to describe the shutdown’s devastating impact on the city’s fiscal condition.

In June, the city estimated that its two-year revenue loss will be at least $9.6 billion—and that’s a low-ball number.

Those estimates do not factor in money that may not arrive from Albany. If the state does not benefit from a new COVID-19 relief bill, the city could lose up to $3 billion in aid.

Urging the mayor to face fiscal realities, DiNapoli concludes his report with these words: “Given the size of the budget risks outlined in this report … the Office of the State Comptroller urges the city to prepare additional actions to balance the budget.”

What actions has Mayor de Blasio taken to balance the city’s budget? So far, it has been mostly fiscal sleight of hand.

He has raided trust fund reserves to the tune of $1.3 billion. The total drawn down could hit $4.1 billion.

The city has also reduced its reserve for collective-bargaining agreements by $1.6 billion. (This is a dubious reduction, considering de Blasio’s history of giving away the store to non-police unions.)

Since de Blasio took office, the city workforce — the largest of any municipality in the nation — has grown by 24,000 bureaucrats for a total of 325,000.

The mayor’s latest plan assumes the number of employees will drop by a paltry 3,656. Most of those, no doubt, will be police and school principals retiring because they are disgusted with the mayor’s inept crisis leadership.

Instead of cutting out the lard in the city’s bureaucracies to balance his budget de Blasio wants to raise taxes on the wealthy.

Prior to the pandemic, 1 percent of the city’s 4 million households—that’s 40,000—paid 50 percent of the city’s income tax.

However, since March, scores of residents living in the city’s wealthiest neighborhoods have fled to their weekend homes in Long Island, upstate, Connecticut and even Vermont.

Gov. Cuomo, realizing the city is losing revenue, has been urging them to come back.

But Cuomo has conceded that his pleas have been falling on deaf ears. Many have said to him that if they stay in their vacation homes, “I pay a lower income tax, because [I] don’t pay the New York City surcharge.”

The governor rightly dismissed raising taxes on the rich because he knows that even if a few thousand of the city’s wealthiest households pull up stakes, the city’s tax collections will crumble.

De Blasio rejected the governor’s position saying: “To the point about the folks out in the Hamptons, I have to be very clear about this. We do not make decisions based on the wealthy few…. That’s not how it works around here anymore.”

The delusional mayor went on to say that the wealthy can afford to pay more in taxes and that many of them would be happy to do so.

During de Blasio’s reign, expenditures have increased by over $20 billion —3 times the rate of inflation. And the mayor’s spending spree was funded by tax revenues from the top 1 percent.

De Blasio is incapable of grasping that the city is dependent on revenues from the wealthy because middle-class jobs have declined significantly in recent decades, and lower-income folks if they are lucky enough to be employed, pay little in local taxes.

De Blasio and regional officials better heed DiNapoli’s warnings and find ways to do more with less.

But if they fail to right-size government and raise taxes on the well-off, they will alienate the very people who have the financial resources to pack up and quit New York.

The following appeared on July 28, 2020 on The Island Now’s website:

The 2020 recession Americans have been enduring is very different from past downturns.

First and foremost, the economic shutdown was induced by government fiat.

But the shutdown was selective in nature. Amazon and the big box stores (Costco, Walmart, Target), which were permitted to remain open, have been doing pretty well financially throughout the crisis.

In the case of Amazon, it has done extraordinarily well. The value of the Amazon stock owned by Jeff Bezos, went up $13 billion one day in mid-July.

The Big Government crowd approve of big stores because their corporate chiefs, who fear boycotts and public denunciations, are easily intimidated.

Hence, the section of the economy disproportionately damaged—small businesses. (Since they are hard to control, Big Government types despise small shops almost as much as they loathe suburban single- family homes.)

A study issued by the Partnership for New York City estimates that one-third of the city’s small businesses—that’s 80,000—may not reopen. That translates into several hundred thousand working-class folks pounding the streets looking for a job.

The news gets worse.

The Wall Street Journal, in an article titled “More Restaurants Forced to Close as Virus Fears Diners Away,” reported that between March 1 and July 10, 2020, over 1,250 New York restaurants have closed permanently.

Only Texas and California — whose combined population is three and a half times greater than the Empire State — have experienced more closings, 1,300 and 2,250, respectively.

Fisher and Phillip’s National Hospitality Practice Group has noted that in August there can be more restaurant closings in New York if the Paycheck Protection Program grants to save jobs runs out. Also, many landlords who offered rent deferments of a few months want to be paid in August.

The Nassau and Suffolk COVID-19 Economic Impact Report released by the two County Executives on July 8, 2020, also paints a dreary picture.

The study states that “net job losses to date total 220,000 and may reach as high as 375 thousand in 2020, reducing local earnings by as much as $21 billion and local economic activity by $61 billion.”

So far, 8 percent of Long Island businesses have closed and the hospitality sector — food and drink services — has been hardest hit.

This helps explain why the highest unemployment on Long Island is among the working class — particularly Hispanic workers.

The selective nature of the coronavirus pandemic closings is wreaking havoc on Main Streets throughout Long Island.

Retail space vacancies are hitting all-time highs — north of 20 percent — which in turn means commercial real estate values will drop and many owners may have no alternative but to default on their mortgages.

Here’s another reason why the recession is unique:

In past downturns, people stopped spending because they were unemployed. Hence, the government often stepped in with deficit spending to jumpstart the economy in order to get people back to work so they could resume spending.

However, as economist Arnold Kling, writing in National Affairs, noted, “In [2020], the government has been more concerned with slowing the spread of the virus, and policymakers actually prefer to see ‘unessential’ consumption activities curtailed. In a typical recession, construction and durable goods manufacturing experience the sharpest decline, while service industries stay relatively stable. In this case, in-person services have been among the hardest hit sectors of the economy.”

Retail and restaurants have been suffering because those lucky enough to be employed with disposable income are staying home and not spending locally.

And their spending habits are changing.

Many, myself included, are ordering more online and are not in a rush to dine indoors. As for outdoor dining, it has not been appealing in 90-degree weather and will not be feasible come November.

In addition, Gov. Cuomo has further hindered restauranteurs by dictating what constitutes a bona fide meal.

Sadly, the coronavirus pandemic will have a lasting impact on New York’s economy—particularly on Long Island. Thanks to poorly-conceived government policies, Main Street shopping may become a relic of a quainter age.

The following appeared on May 18, 2020 on The Island Now’s website:

Every New Yorker is enduring the social, economic and fiscal consequences of the government-ordered shutdown.

The hardest hit—seniors.

Some 80 percent of the victims of the coronavirus have been over the age of 60. And 5,500 have died in New York nursing homes thanks to stupid decisions by the governor and his Health Department officials.

In recent years, I have come to learn a lot about nursing home facilities. In March, hours after the lockdown began, my 90-year-old mother died in a nursing home—but not of the virus.

The last time I saw my 93-year-old father in that same nursing home was when I told him his wife of 70 years had passed away.

Thankfully, as I’m writing this essay, he is in good health.

Anyone who has visited loved ones in a nursing home, as I have, quickly learns that even a mild head cold can spread quickly from resident to resident.

So, in this pandemic, for the governor to order on March 25 that senior residences must accept elderly who were COVID-positive was maddening.

The fact that Gov. Cuomo refuses to take responsibility for his actions compounds his negligence.

Heads should roll in the state Health Department and hopefully voters will remember Cuomo’s screw-up and punish him at the ballot box if he seeks a fourth term in 2022.

As for the economic impact: 36 million people have applied for unemployment benefits and 23 percent of those lucky enough to have a job have taken pay cuts.

In New York, jobless filings have hit 1.9 million. E.J. McMahon, of the Empire Center for Public Policy, has determined that the claims “represent about 21 percent of the state workforce.” He added, “This is well beyond anything we’ve seen before.”

Compared to a year ago, unemployment claims on Long Island have jumped 1,535 percent.

In households where total income is under $40,000, unemployment is at 40 percent.

In April, retail sales were down 16.4%. The largest monthly drop in recorded history.

Since February sales in clothing stores have been down 89 percent; in electronic and appliance stores, down 65 percent; and food services and drinking establishment sales, down 50 percent.

To get out of the house last week, my wife and I drove out to Port Jefferson in Suffolk County. This popular destination spot was a ghost town.

It struck me that many of those closed shops will probably never reopen. The Long Island retail store vacancy rate, which was about 18 percent before the pandemic, will soar even higher.

This means many working-class folks who were laid off will not return to work. In addition, owners of commercial real estate with no income will default on mortgage payments.

Foreclosures will drive down real estate values, which, in turn, means property tax revenues will decline.

And fewer shops mean less sales tax revenue.

State Comptroller Tom DiNapoli has reported that in April local sales tax collections, statewide dropped 24.4 percent vs. April 2019. In Nassau County, there was a 26.1 percent decline of $24 million.

What does this fiscal crisis mean to taxpayers? First and foremost, Nassau residents will probably be burdened with paying off a lot more county debt. A provision buried in Cuomo’s state budget permits the Nassau Interim Finance Authority to issue hundreds of millions of bonded debt to fund the county government’s operating deficit.

Property taxes could also go up.

But what about government layoffs before sticking it to civilians?

Too many elected officials are saying they will have to cut essential services—cops, firemen, first responders—if there is not an infusion of cash from the feds, the state or from taxpayers.

This practice, Bob McManus of The Manhattan Institute has observed, “gives cover to politicians eager to move on to the next step—the protection of entrenched interests by expressing deep dismay, and then raising taxes.”

Yes, before picking the pockets of the general public, political hacks buried in the bureaucracies of local governments should be canned.

And as McManus also suggested, to make ends meet, how about bringing “public employee fringe benefit costs in line with the public sector” or reducing spending to “cost-of-living adjusted national norms” or reducing public pension benefits and corralling Medicaid costs?

As so many people are struggling to hang on, there should be no protected political class. Simple fairness demands a level playing field.

The following appeared on December 30, 2019 on The Island Now’s website:

Right before Christmas, Governor Andrew Cuomo handed out $760 million in so-called capital grants and state tax credits throughout New York. One goodie he doled out to the tune of $3.5 million was for the construction of a hip-hop museum in the Bronx.

When grappling with his first budget in 2011, Cuomo condemned “Members Items”— pork awarded by legislative leaders to members who behaved themselves and towed the party line during the legislative session — as a waste of taxpayer dollars.

After being praised by editorials and the good government crowd for eliminating this abuse, Cuomo turned around and established his own pork machine via Regional Economic Development Councils.

Since 2011, Cuomo has handed out over $6.2 billion of goodies to local businesses and communities. And anyone who thinks the grants are not politically connected should get their heads examined.

A report released in December by the Citizens Budget Commission, an independent fiscal watchdog, questioned the selection process: “…the implementation of REDC has shortcomings. Many of the projects are unrelated to regional or state economic development strategies. Projects tied to strategies are dispersed among industries and areas within each region such that no single strategy garners the sustained, intensive investment necessary to spur lasting economic growth. Finally, REDC activity is opaque, with inadequate follow-up reporting on each project and inconsistent of regional performance.”

While tossing around money for dubious projects throughout Long Island, the governor appears to be ignoring the Island’s crumbling infrastructure.

An analysis recently made public by the Long Island Contractor’s Association revealed that of the 379 miles of roads analyzed, “82 percent were rated to be in ‘poor’ or ‘fair’ condition.”

One hundred and forty-seven miles of pavement tested were rated in “poor” condition; and 164.4 miles were rated in “fair” condition. A mere 1 percent were rated “excellent.”

What is most interesting about the finding of the independent study, performed by Advance Testing Company, is that the worst sections of highways examined were segments of roads controlled by the state: Meadowbrook State Parkway, New York State Route 109, Northern State Parkway, and Southern State Parkway.

One does not need to be an engineer to know that for Long Islanders, safe roads are essential. That’s because Nassau and Suffolk residents own over 2.3 million automobiles. That number of vehicles exceeds the total in New York City’s five boroughs.

Lawrence Levy, Dean of Hofstra’s National Center for Suburban Studies, put it this way: “Suburbia is reliant on the automobile to move people and trucks to move goods. It is unthinkable to allow our roads to deteriorate to the point where they not only impede economic progress but possibly pose a safety hazard. America’s oldest suburb cannot let its infrastructure age prematurely and expect to remain viable.”

At a Dec. 6 hearing of the state Assembly Committee on Transportation, Marc Herbst, executive director of LICA, pointed out that “Simply put, there are not enough funds allocated to address [road infrastructure] needs.”

He went on to say “The interstate highway system and most state highways were built over 50 years ago and we should prepare for most to reach the completion of their life cycles simultaneously. It is imperative for our government leaders to identify funding sources to responsibly address the tremendous needs in the next spending plan.”

Herbst, a former assemblyman and ordained minister, called on the Legislature to fund our crumbling infrastructure “with an amendment in each legalized sports betting, legalized marijuana and prostitution decriminalization bills” which are projected to generate $375 million annually.

Instead of pandering to special interests with pork subsidies, it’s time for the governor and the Legislature to abandon such follies and to focus on the needs of every citizen — safe roads and highways.