A PARODY…OF SORTS

From: Oyster Bay Republican Club

Re: Year End Wrap Up

Well, it was a mixed year.  We couldn’t take the luxury box at Giants Stadium paid for by our rich donors and so the Club didn’t have a place to hang out during the Super Bowl.

On the positive side, we did win the elections and no indictments have been issued.

NIFA’s Kaiman is one of us, a hack, sure, a Democratic hack, but one who recognizes how this game works.  Plus, he wants to be somebody and will stay in line.

The Club is worried about the County unions, especially the PBA.  I don’t know how much longer the PBA leadership will buy “Ed’s a nice guy and wants to help you.”   Even Carver will at some point say no mas.  This PBA forgot that police and other public employees need tax increases to get their steps, pay increases, etc.

Ed’s a Forrest Gump financial genius. He fought NIFA based on Ciampoli’s advice (Ciampoli was wrong on every legal case he touched). The County lost, an humiliating NIFA takeover was imposed on Ed and it’s the best thing that ever happened to Ed.

This wage freeze scheme saves the County hundreds of millions of dollars and avoids the need for a property tax increase maybe ever.  Ed’s dream of a third terms looks “100 percent.”

Ed “fights” the wage freeze but if it were lifted the required County property tax increase would make Suozzi (remember him?) look like a piker and we would beg to have it re-imposed.  Plus, Kaiman writes an essay on NIFA on the math section of the County SAT without a single number.  This thing will blow up some time but we’ll all be on OTB payroll by then trying to get a piece of VLT vendor action.

Some of the young cops will some day figure out that Mangano has played them but until then let’s keep Sandy funding coming in.

See you all at the Castle for poker and some extra-curriculars on Thursday.

The following appears in the February 28-March 6, 2014 issue of the Long Island Business News:

Since the Nassau County Interim Finance Authority declared a “financial control period” on Jan. 26, 2011, county officials have wasted hundreds of thousands of dollars of taxpayer’s money on “Hail Mary” lawsuits, all of which have been lost.

In February 2011, for instance, instead of coming to grips with the county’s fiscal problems, Nassau filed a suit claiming NIFA didn’t have the power to impose a control period. One month later, on March 11, 2011, the state Supreme Court ruled against the county, stating “the petitioners have failed to meet their heavy burden of showing the unconstitutionality of the control period statute.”

The court also ruled that NIFA was correct in disallowing borrowed funds as operating revenue when calculating a projected deficit. Despite the ruling, the county continues to erroneously declare at the end of every fiscal year that its budget is “balanced” by counting borrowed money and deferring the payment of outstanding liabilities until the next year.

This is akin to deferring your December mortgage payment to January, paying your bills with a credit card and boasting your checking account was balanced at year’s end.

Last week, Nassau suffered another major loss when the state’s highest judicial body, the New York Court of Appeals, ruled 7-0 against a tax refund case.

Instead of making every effort to fix the county’s broken property tax assessment system, the county Legislature – at the urging of County Executive Ed Mangano – passed a law in 2010 that repealed the provision of a 1948 state law that obligated the county, rather than local taxing districts like school districts, to pay any refunds “from the county’s erroneous assessment of real property taxes.” Gov. Thomas Dewey signed the legislation into law after the Nassau County Board of Supervisors sent to Albany a home rule message urging approval.

I can only conclude that county officials enacted this ridiculous repeal legislation because they failed high school civics courses, which teach that the local municipality is a creation of the sovereign state and subject to its laws.

Apparently, Mangano and his cohorts didn’t know they only have the power to amend local laws, not state laws. And while the county executive, in my judgment, is correct in arguing that it’s unfair that Nassau is the only county in the state required to pay its municipal subdivisions’ tax refunds, he must petition the state Legislature to abolish the 1948 guaranty law.

The court reminded the county that the state constitution establishes the state government as “the pre-eminent sovereign of New York” and the lawmaking power of a county or other political subdivision “can be exercised only to the extent it has been delegated by the state.”

The court also stated the New York constitution “expressly imbues the state government, rather than any locality, with the power of taxation.”

Concluding that the county superseded a special state tax law, the Court of Appeals unanimously declared that the repeal of the county guaranty is “unconstitutional, invalid, unenforceable and void.”

What an embarrassment! Arrogant county officials who have dithered with this case for almost three years have proven not only to be incompetent, but delusional.

Thanks to the character flaws of Nassau’s political class, overburdened taxpayers and their children and grandchildren will now be stuck paying off, for decades to come, the bonded debt the county will have to incur to pay off some $500 million in current property tax refunds.

The Jon Kaiman “Plan to Modify Wage Freeze”:

 A Review

Nassau County wage freezes imposed by NIFA, at the request of County Executive Mangano in 2011, 2012 and 2013, have saved the County approximately $230 million and has saved the County from financial insolvency.

In other words, instead of making additional spending cuts or renegotiating union contracts or raising property taxes, the County has saved its fiscal skin by taking $230 million from Nassau workers.

Because the County has not adequately addressed its projected operating deficit for 2014, it will have to request NIFA to impose another wage freeze in March 2014.

It is interesting to note, however, that ever since Nassau County PBA boss, Jim Carver, met with the Executive Deputy Secretary to Governor Cuomo in October 2013, NIFA Chairman Jon Kaiman has been desperately trying to get a deal done that would lift the wage freeze on police personnel in 2014.

Kaiman’s “Hail Mary” effort was described in a memorandum he distributed to NIFA board members titled “Plan to Modify Wage Freeze” dated February 4, 2014.

What was most remarkable about Kaiman’s rambling memo was that it did not contain any financial numbers.  That’s probably because PBA proposals do not meet the goal of being cost neutral.

Time and again the PBA has put on the table proposals that have been rejected because its rosy financial assumptions do not hold up when analyzed by NIFA staff.  For instance, in October 2013, a NIFA analysis of a PBA proposed Memo of Agreement revealed that the document was not cost neutral but would cost the County “approximately $240 during the term of the Multi-Year Plan with additional expenses continuing during an extensive period.”

In addition, PBA proposals always insist on counting police force attrition which is already included in the County’s operating budget.  Attrition savings cannot be counted twice!

Proposals work if the projected savings are equal to or more than the wage freeze in real dollars during the life of the proposal.  A proposal fails if it costs even a dollar more than the wage freeze saves.

Time and again when the math did not work, the PBA threw down intangibles on the table—like morale.  And that’s exactly what Kaiman resorted to in his numberless memo.  Given police minimum manning and the extraordinarily high overtime, and that median police compensation is higher than the median compensation of Nassau taxpayers, it seems unlikely that the police are depressed.

Furthermore, to suggest that the wage freeze “has had a serious affect on morale and is leading to a crisis scenario”, does not speak well of the policies of Kaiman’s boss, Governor Andrew Cuomo.  Lest one forget the Governor has supported a “0, 0, 0” position on wage increases for state employees.

For Kaiman to argue that his numberless proposal, if implemented, could lead to a “permanent lifting of the wage freeze” is ridiculous and legally impossible.  NIFA under its statute cannot commit not to impose a wage freeze.

Then there is the issue of the union lawsuits against NFA that argue the wage freeze is unlawful.  The PBA’s offer to withdraw its lawsuit and waive future litigation if a deal is struck is equivalent to giving sleeves off a vest.  The unions know the case law on wage freezes side with NIFA.

Finally, Kaiman’s latest “Hail Mary” pass—counting $8 million of very rosy projected fines from additional red light cameras—just doesn’t cut it.  In the unlikely event fines reach projected amounts, it would not be enough to fund the PBA proposal.

The Kaiman memo is ultimately all gibberish without numbers.  To get headlines and his photograph in the press, Kaiman is willing to capitulate and to destroy the public integrity of NIFA.

PREAMBLE

I had the privilege of serving the people of Nassau County as a Director of the Nassau Interim Finance Authority (NIFA), a New York State financial oversight and control board, for four years.  During most of my tenure as a NIFA Director, Nassau was in a control period because the County had failed to adequately address its fiscal deficit.

Since the NIFA control period began on January 26, 2011, the County has failed to stop illusory budget practices and to stop juggling money to keep on the budgetary lid.  Instead of managing fiscal realities, County officials have governed by finger-pointing, issuing rosy press releases and attending ribbon-cutting events.

As a result of the County’s incompetence, negligence and indifference, the NFIA staff projects operating deficits of $157 million in fiscal year 2015, $190 million in 2016 and $255 million in 2017.

A control period is a Draconian measure that a locality should wish to avoid and if it occurs, to climb out of as quickly as possible.  But not Nassau.  It prefers to defer tough decisions and blithely go along la de da, tomorrow is another day.

The Nassau County Mangano-Kaiman Watch is dedicated to exposing fiscal and political shenanigans of County and NIFA officials and to waging a genuine reform campaign to prevent fiscal catastrophe and to restore taxpayer confidences.

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

Most candidates who get elected running to the far left or far right of the political spectrum generally move toward the center once they’re sworn in.

This is not the approach of New York City Mayor Bill de Blasio.

In his first month in office, de Blasio made it clear he’s sticking with an extreme leftist agenda. He insists that free markets and trickle-down economics won’t reduce inequality, and to achieve a more “just society” his administration is preparing to take serious “actions” and make “substantial government investments” – aka increased welfare spending.

His progressive actions to date, as one New York Post wag wrote, appear to be about doling out punishment: “punishing the wealthy by raising their taxes, punishing [school] charters by depriving them of space, punishing cops by branding them as racist, even punishing workers whose only crime is to take folks on horse rides around Central Park.”

One policy he’s adamant about is raising the city’s income tax rates. During the campaign, he stated that the tax increase was to fund universal pre-kindergarten classes. But after Gov. Andrew Cuomo announced the state would provide the money to pay for pre-K programs, de Blasio admitted he still wanted an income tax increase. His war on “income inequality,” he said, requires it.

If de Blasio gets his way, a very small pool of people – about 40,000 out of 8.5 million – will be affected. These wealthiest, who presently pay about 50 percent of total city income taxes, will have to fork over considerably more: Those who make more than $1 million, on average, will have to pay an additional $7,793 annually; over $5 million, $33,518; over $10 million, $182,893.

However, the increased income tax revenue will not be sufficient to fund all de Blasio’s social welfare plans and to pay off his key supporters – public sector employees, who expect $7 billion in back pay and significant salary increases going forward. Hence, property tax levies will probably go through the roof.

Compared to Nassau County, taxes on NYC single-family residences are relatively low. In the borderline Village of Floral Park, for instance, a post-World War II Cape Cod home on the Nassau side pays about $9,000 in total taxes, while across the street a city resident pays about $3,000 on the identical house. This disparity exists because city folks have the additional burden of paying a local income tax.

But de Blasio doesn’t care about that. To pay for his redistributive programs, he’ll happily increase the property taxes on the very middle class he claims he wants to help.

There could be economic and financial opportunities for Long Island to reap if the cost of living in the city skyrockets and the quality of life declines (i.e. crime goes up), and the mayor increases the regulatory burdens on small businesses such as expanding wage laws and paid sick and maternity leave.

To escape the city’s progressive policies, a significant number of the top 40,000 may look to suburbia. Despite Long Island’s high property taxes, on a net-net basis, the city’s 1 percenters might pay less by making the move.

Some may move to LI to avoid the income tax while keeping their city apartments. Remember, people who relocate – to, say, Sands Point – can spend up to 180 days annually in their city apartments and still claim their Long Island home as their permanent residence.

Instead of the governor of Texas poaching New York’s wealthiest folks and entrepreneurs, maybe it’s time for Long Island’s elected leaders to put out the red carpet – particularly, for those who aren’t quite ready to move to the culturally barren Southwest.

Convincing them to relocate here could be a layup – even for our bumbling county officials.