The following appears in the June 6-12, 2014 issue of the Long Island Business News:

Eighty-year-old Richard Ravitch has had a remarkable life. The skilled entrepreneur made a fortune early on in Manhattan real estate, and free of financial woes he went on to serve the people of New York in various capacities – most recently as Gov. David Paterson’s appointed lieutenant governor.

In his memoir, “So Much To Do: A Full Life of Business, Politics and Confronting Fiscal Crisis,” Ravitch describes his contributions during New York’s fiscal crisis of the mid-1970s, his stewardship at the Metropolitan Transportation Authority and his role in later years as a “wise man” whose advice on municipal matters has been widely sought.

While his memoir is at times self-serving – all such works are – it is nevertheless filled with lessons taxpayers and elected officials can apply to present-day fiscal challenges.

It all began in 1975, when newly sworn-in Gov. Hugh Carey asked Ravitch to take over the ailing Urban Development Corp. Created by Gov. Nelson Rockefeller in 1968 after the assassination of the Rev. Martin Luther King Jr., UDC issued debt, backed with the state’s moral obligations to build housing in “substandard blighted areas.”

But the corporation was poorly run, and the investment community refused to underwrite additional debt. In February 1975, UDC defaulted on $104.5 million worth of notes.

The politically green Ravitch, with Carey’s blessing, brought the bankers together and threatened to file bankruptcy. “The banks blinked,” he writes in his memoir. “They agreed to withdraw their set-offs against UDC accounts.”

Ravitch helped create a plan that remedied the default, affirmed the state’s “moral obligation” to meet UDC’s principal and interest payments to bondholders and prevented chaos in the financial markets.

The UDC defaulted at the same time that New York City was running into fiscal difficulties. In 1975, city expenditures totaled $12.8 billion and revenues $10.9 billion. Fifty-six percent of locally raised taxes were appropriated for debt services, pension and Social Security payments. Years of budgetary gimmicks, phantom revenues, capitalization of expenditures and excessive use of short-term debt to fund daily operations forced the financial markets to close their doors to the city in 1976.

Ravitch was present at the creation of the Municipal Assistance Corp. and the Emergency Financial Control Board, which saved the city from bankruptcy. He also played a key roll in convincing the teachers union to use pension-fund assets to purchase long-term MAC bonds, whose proceeds were used to pay off the city’s heavy load of short-term debt.

One observation Ravitch makes that all New York elected officials, particularly those on Long Island, should heed: “The city’s most egregiously misleading gimmick … was to treat the proceeds of borrowing as revenues and to use these revenues to claim that the budget was in balance.” This gimmick brought NYC to its fiscal knees and may soon do the same to Nassau and Suffolk counties.

As lieutenant governor, he blew the whistle on the state’s cash accounting abuses, “which enables the state to avoid giving the public the bad news that expenditures may be growing faster than recurring revenues.” He has rightly called for state and local municipalities to abandon deceptive cash accounting and to adopt GAAP accrual standards.

Since that time, Ravitch has served on a long list of boards and commissions. After he left public office in 2011, he became co-chairman of the State Budget Crisis Task Force and has continued to make the case that “deceptive budgeting and borrowing practices are crippling our state’s ability to do what they can do – invest in the physical and human infrastructure the country needs to thrive.”

Just this past month, a judge in Michigan overseeing the Detroit bankruptcy case appointed him a special advisor.

If you want to learn what it takes to fix our current fiscal ills, read Ravitch’s memoir.

The following appears in the May 23-29, 2014 issue of the Long Island Business News:

When Andrew Cuomo was a candidate for governor, I had several opportunities to chat with him one-on-one. Like many others, I concluded there was a new Cuomo more interested in implementing good public policies than settling political scores.

Cuomo appeared to have a good understanding of the state’s financial and economic woes and seemed determined to govern from the center. As a bona fide conservative living in a very blue state, I figured this was as good as it gets.

In Cuomo’s first months as governor, he took on vested interests to balance a budget that had a projected $10 billion deficit. By the end of 2011, however, the governor began to revert to the old cynical and ruthless Andrew.

He broke his pledge “to veto any increase in personal or corporate or sales taxes” and forced through the State Legislature a bill to extend New York’s biggest income tax increase since Nelson Rockefeller.

In addition to breaking pledges and succumbing to blue smoke-and-mirror policies, Cuomo became increasingly isolated, meeting with few outsiders. Even his public appearances have been completely controlled, generally held at government facilities to avoid protesters or questions from enquiring taxpayers or reporters.

Stories circulate in Albany that Cuomo’s overworked staff has had to put up with his micromanaging, temper tantrums and verbal abuse. When a low-level employee at the Department of Transportation was quoted in an upstate newspaper without preclearance from the governor’s office, the governor ordered the man terminated – even though his comments were favorable. The reason: to instill fear.

It get’s worse: Here’s what Cuomo said in January on “The Capital Pressroom,” an Albany radio talk show, about a large segment of New York voters:

“Who are they? Are they these extreme conservatives who are right-to-life, pro-assault weapons, anti-gay? Is that who they are? Because if that’s who they are and they’re the extreme conservatives, they have no place in the State of New York, because that’s not who New Yorkers are.”

If that’s the standard, the leader of the Catholic church in New York, Timothy Cardinal Dolan, is not welcome because he upholds Catholic teachings opposing same-sex marriage and abortion.

Answering accusations that he tampered with the independent Moreland Commission on Public Corruption, Cuomo made this bizarre comment: “The Moreland Commission was my commission. It’s my commission. My subpoena power, my Moreland Commission. I can appoint it. I can disband it. I appoint you. I can un-appoint you tomorrow. So, interference? It’s my commission. I can’t interfere with it because it is mine. It is controlled by me.”

Now perceived as a man who has no core beliefs, Cuomo has managed to alienate people on both the right and the left of the political spectrum.

Energized pro-fracking, pro-gun, pro-life voters are expected to come out in droves this November to punish the governor. On the left, supporters of the Working Families Party may put up a candidate to oppose him, or just sit out the election.

Here’s what progressive Bill Samuels, a leading New York entrepreneur and former finance chairman of the N.Y. State Senate Democratic campaign, said of Cuomo on the PBS show “New York Now”:

“He is just not a Democrat. He shut down the Democratic Party … It’s over for him as a Democrat nationally. There is no coming back for him. He’s dead nationally unless he becomes a Republican … I don’t have any friends in the business community who like [him]. People say ‘I’m afraid of him.’ When history is written, he’ll just be a mediocre governor that had a Nixon personality.”

Cuomo’s mean-spirited behavior is hurting him. And if he continues in that vein, the GOP’s Rob Astorino may begin to look like the guy on the white horse New Yorkers have been searching for to restore the economic and political wellbeing of the Empire State.

The following appears in the May 9-15, 2014 issue of the Long Island Business News:

At 2 a.m. Saturday, May 3, 2014, the board of directors of the Nassau Interim Finance Authority voted 6-1 to approve deals with four municipal unions based on financials everyone knows are delusional.

With that, NIFA sanctioned the fiscal demise of Nassau County and forfeited its reputation as an above-the-fray oversight board.

As for the deal, it’s not cost-neutral and will cost the county as much as $290 million in expenses over its present multiyear plan.

Worse yet, the deal doesn’t factor in the 15 percent decline in sales tax revenues in the first quarter of 2014, the decline in mortgage recording tax revenues and the $85 million misstatement of Nassau’s pension obligations.

Nassau’s budget for fiscal 2014 is so out of whack that even hapless Comptroller George Maragos warned the county must prepare to deal with shortfalls by either making significant spending cuts or by raising taxes to the tune of $70 million.

NIFA’s lone dissenting voice was Director Chris Wright, a topnotch certified public accountant who has a razor-sharp mind and an articulate debating style. Wright correctly argued that the agreements cost nearly $300 million more than they’ll save over the four years of the county’s current multiyear plan.

“Every objective, competent analyst concerned with the county’s finances understands that,” Wright says. “So does our staff. And so do we.”

To give themselves a fig-leaf cover, the NIFA board passed a resolution ordering the county executive to provide a modified financial plan within 60 days “detailing how Nassau County will cover the costs of new labor agreements, with the understanding that NIFA thereafter shall exercise its own power to modify the financial plan as needed.”

Unless the NIFA board actually plans to follow through this time, this resolution is merely bad theater. Time and again, such NIFA orders have been defied; as recently as January, NIFA’s order that Nassau revise its multiyear plan and overturn raises to non-union employees in 30 days was ignored by the county.

Who is to blame for this NIFA mess? Gov. Andrew Cuomo.

Cuomo doesn’t like control boards. One reason might be that oversight boards are the legacy of one of New York’s greatest governors: Hugh Carey, a man both Cuomos, Mario and Andrew, have despised. Another reason: Cuomo is a control freak who doesn’t want independent-minded financial experts governing public agencies.

To emasculate control boards, he has been appointing political knaves as directors. This has been most evident in his recent NIFA appointments. NIFA Chairman Jon Kaiman is known as one of Nassau’s leading political hacks; this vulgar, intemperate man is also on Cuomo’s payroll earning $150,000 a year for a job with no real description.

Another political lightweight Cuomo put on the board was Paul Annunziato. This Republican, a crony of Deputy County Executive Rob Walker, made this inane statement when he voted in favor of the bogus union deals: “We can’t deny the county’s union labor raises because we have a deficit anymore than we can stop plowing streets because it snowed a lot.”

The comparison of wages and deficits to plowing and snow is idiotic. Needless to say, if the county runs out of money because of its massive deficits, exacerbated by these deals, the raises won’t be the issue; making payroll will be the issue.

To secure the endorsement of Republican lobbyist Al D’Amato, and to ensure that Nassau’s rusty GOP machine sits on its hands this fall, Gov. Cuomo has destroyed New York’s greatest contribution to the cause of saving ailing municipalities from becoming Detroit – the financial control board.

Thanks to Gov. Cuomo and his NIFA hacks, expect Nassau County to have a cash crisis; expect the credit agencies to drop Nassau’s ratings; and expect boomers and young people to continue the mass exodus to tax- and job-friendlier regions.

The following appears in the April 25-May 1, 2014 issue of the Long Island Business News:

The Nassau Interim Finance Authority was created as an independent state authority in 2000 to help restore the county’s fiscal health, which had been suffering from mismanagement, cronyism and sleaze.

Prior to the state taking action, the Nassau County Legislature unanimously approved a home rule message requesting that Albany create a state oversight panel to guide the county’s budget policies. By asking for an authority possessing budgetary oversight powers, legislators conceded they couldn’t trust the elected government to manage the county’s finances responsibly.

To give elected officials time to reform the tax certs mess and to achieve a structurally balanced budget, the NIFA Act also permitted the county to borrow – and count as “operating revenues” – money to pay down accumulated tax certs refunds totaling $947 million through the end of 2007 only.

NIFA’s authority to approve or disapprove budgets and fiscal plans expired in 2008. Sadly, Nassau pols quickly reverted to bad fiscal behavior, forcing NIFA to impose a control period in January 2011.

By approving in April 2014 the Kaiman union deals, Nassau elected officials proved, once again, they are incapable of managing the county’s finances responsibly. They succumbed to pressure to approve contract amendments that every objective analysis concluded are not cost neutral and could cause the county to become insolvent.

NIFA directors are required to bring their own independent judgment to the table. Now it’s up to you to exercise that vested authority, to decide whether to approve or reject the Kaiman deals. But before casting your vote, here’s some food for thought for directors who either voted “yes” on the plan when it was presented, fact-free, on March 10, or from whom the public has yet to hear on the matter:

Director John Buran: As the CEO of a major banking institution, if a proposal came before your loan committee with questionable revenue streams and inaccurate cost assumptions similar to those in the Kaiman deals, would you vote for it?

Director Paul Leventhal: As a certified public accountant, would you sign off on a deal with these numbers? Would Nassau’s cash flow projections survive the analysis required to consider a “clean opinion?”

Director Lester Petracca: As a successful commercial real estate developer, would you invest in a project based on financial projections similar to those in the Kaiman deals?

Director Paul Annunziato: As a federally licensed financial advisor, would you recommend to your clients an investment with rose-colored estimated revenues and blinders-on cost estimates similar to the Kaiman deals?

The first control board was created in 1975 to prevent NYC from becoming a Detroit. To eliminate excessive short-term borrowing and to achieve a GAAP-balanced budget, the city had to eliminate 20 percent of the workforce and abolish scores of programs and departments.

The NYC Control Board succeeded because its members did their jobs and made unpopular decisions. Since 1982, NYC has had a GAAP-balanced budget every year and, as a result, the city has prospered.

If you vote to approve the Kaiman deals, you will cause irrevocable harm to existing and future control boards. You’ll destroy the belief that control boards are above the political fray. Ratings agencies and investors will lose all faith in them.

Approval of the Kaiman deals will also cause the county to issue more short-term debt to pay bills. Since rating agencies are very sensitive to such cash flow problems, expect county debt ratings to be downgraded.

Whether or not Nassau becomes a Detroit is up to you. How you exercise the independent judgment required of you is also up to you, not anyone else. You own your own votes and the consequences will inure to your personal and professional reputations.

I recommend you contemplate the words of Sir Thomas More: “When statesmen forsake their own private conscience for the sake of their public duties, they lead their country by a short route to chaos.”