The following appears in the August 16-22, 2013 issue of the Long Island Business News:

British journalist G.K. Chesterton described this time of year when politicians grope to get the attention of a general public occupied with more important matters – i.e., vacationing with their families – as the “Silly Season.”

This summer is no exception to Chesterton’s rule. Viewing the Weiner and Spitzer antics, for instance, Gov. Andrew Cuomo recently said, “My take on the situation is this: This is summer political theater in New York. We laugh, because if we didn’t laugh, we would cry.”

With Spitzer and Weiner dominating the news, here’s a few silly events you may have missed:

First, there is the case of New York’s most forgotten three-term governor, George Elmer Pataki. Every year around this time he manages to get his name in the papers. In 2012, he proudly announced the formation of his super PAC, “Tipping Point,” dedicated to maintaining the GOP’s congressional majority.

That was the last word the public ever heard of it because the PAC raised a piddling $30,000.

This summer, Pataki made the news defending himself in court against charges that he had kept more than 100 convicted sexual predators in psychiatric hospitals after their prison sentences were completed.

I have argued for years that Pataki was a lifestyle governor totally disengaged from the management of the state and who governed by press release. In testimony, Pataki confirmed my contention. He admitted that he had nothing to do with the planning and execution of his sexually violent predator initiative. He also said he had nothing to do with the statements released by his office that quoted him ordering the commencement of the program.

“That’s not how the press office operated,” Pataki said in court.

He went on to say that his communications office was authorized “to put out statements including quotes with my name, based on their knowledge of the position of the administration.”

In other words, Pataki was so out of touch he didn’t bother reading press releases in which he was quoted. His successful defense was based on a plea of ignorance of his own statements and policies.

Next is the case of the Long Island Power Authority rate increase. Only days after Cuomo proudly signed into law the so-called LIPA reform legislation, the agency announced a 4 percent hike in monthly customer bills. When inquiring minds asked about Cuomo’s pledge to freeze rates for three years, they received an Orwellian newspeak answer.

The promised freeze is now only a goal and “LIPA rates constitute the electricity delivery charge only, and do not include the power-supply charge.”

I don’t remember that distinction being declared in bold print when the administration was forcing the flawed LIPA legislation down the throats of legislators. And readers should know that there have been only two “rate” increases since LIPA took over in 1997. The countless other increases were all fuel related.

So, don’t expect much relief under the PSEG regime.

Finally, there’s the mysterious case of the Green Party candidate for Nassau county executive. Phillipp Negron, the 25-year old stepson of Nassau’s IDA chairman, Timothy Williams, declared he would seek the nomination of the Green Party one week after he was hired by the county’s Department of Public Works. In other words, he decided to run against the man who just hired him.

To add to the madness, County Executive Ed Mangano’s press spokesman, Brian Nevins, collected nominating petition signatures for the young candidate. When was the last time you heard of a top official helping a candidate who was opposing his boss?

Negron abruptly ended his three-week candidacy on Aug. 1 after the validity of a number of his petition signatures were challenged in court. It remains to be seen if he keeps his county job.

Pretty bizarre stuff. We are indeed in the Silly Season.

The following appears in the August 2-8, 2013 issue of the Long Island Business News:

Shortly before the City of Detroit filed for bankruptcy, Emergency Manager Kevyn Orr released a 130-page report describing the history of its decline and the impact on its people, finances and infrastructure.

In the post-World War II era, Detroit – a major manufacturing city with a population of 1.8 million – was declared the nation’s most desirable place to live and work.

Sadly, this distinction was short-lived. In the late 1960s, the automobile industry began eliminating jobs due to foreign competition.

People leaving for greener economic pastures caused the city’s tax base to erode and taxes were regularly increased on shrinking numbers of taxpayers.

The 1965 race riots, plus corrupt, incompetent and cowardly elected officials who refused to come to grips with the growing crisis and continued to give away the store to municipal employee unions, only hastened Detroit’s decline.

By December 2012, the city’s population stood at 684,000, down 63 percent from its 1950 peak, and unemployment was 18.8 percent.

Along the way, Detroit also earned the distinction of having the highest violent crime rate of any city in America with a population of more than 200,000.

Because there are 78,000 abandoned homes and 66,000 blighted and vacant lots, the remaining people pay the highest local income, property and utility taxes in the state of Michigan.

Ever-growing pension and health care costs for retirees has forced the city to drastically cut services. As a result, 40 percent of street lights are broken, 60 percent of the parks are closed and the unmaintained electric grid is rapidly deteriorating.

New York State, contrary to all the happy talk we hear from Gov. Andrew Cuomo and other pols, has its own Detroits that are on the edge of the fiscal abyss.

Like Detroit, the cities of Buffalo, Niagara Falls, Rochester, Syracuse, Elmira, Ithaca, Utica and Binghamton are turning into municipal deserts.

Buffalo’s population, which stood at 580,000 in 1950, is 259,000 today – a drop of 55 percent. More than 40,000 of its homes have been abandoned. The City of Niagara Falls’ population during the same period has dropped 51 percent to 50,000. An astounding 35 percent of its homes are vacant.

Since post-war population peaks, Syracuse is down 34 percent, Rochester 37 percent, Elmira 42 percent and Utica 38 percent, while Binghamton’s population has dropped 42 percent.

Upstate municipal governments are having trouble maintaining services not only because of the outrageous costs of government employee retirement benefits, but thanks to the additional burden of unfunded state mandates the governor has failed to address.

In Erie County, where Buffalo is located, officials have complained that every penny collected in county property taxes is used to pay for unfunded mandates like Medicaid. And that’s before they pay for libraries, plow any roads or cover police services.

Financially struggling upstate taxpayers, relative to their incomes, are paying the highest per-capita local taxes in the state. Yes, higher than here on Long Island.

If state officials continue to ignore upstate’s fiscal plight, and mayors and county executives follow Detroit’s lead and seek Chapter 9 protection, every municipality and citizen in New York will be adversely impacted.

Costs for borrowing will go up and long suffering taxpayers will have to pay higher taxes and endure more service cuts.

This Op-ed piece I wrote appears in the New York Post on August 2, 2013.

Statement by
George J. Marlin
Director
Nassau Interim Finance Authority

July 30, 2013

At the December 8, 2011 NIFA board meeting among other things I said:

“… The members of this Board are asked to approve a 2012-2015 Fiscal Plan that includes $305 million of new Tax Certs borrowing; $64 million in judgments and settlement borrowing and $80 million of borrowing for termination pay….

“In return for imposing on taxpayers another multi-generational backdoor tax increase, the County pledges it will … obtain $150 million of … cuts in the operating budget….

“Personally, I have very little faith in the County’s ability or will to achieve these goals.  In my judgment, the County has no creditability because time and again in dealing with fiscal matters, the County has been disingenuous, deceptive and delusional.

“However disturbed I am at the plan that the County has put before us today, and however skeptical I remain about its willingness to affect the measures necessary to effect fiscal change, I am also cognizant of our role as a Board and the repercussions our decision here today will have….

“To close the County, based on their unacceptable actions to date and on our fear that they will not do what they purport they will do, would not be unreasonable or unjustified.  Nevertheless, upon reflection, I believe that the Board should not exercise this Draconian option at this moment….

“And let me remind the County that approval of a plan is not approval of all the parts.  NIFA will base the approval of each part of the plan that comes before us in the coming months on whether the County carried out its responsibilities.”

Today I continue to have little faith in the County because it still fails to carry out its responsibilities.  The County broke its 2012 promise to obtain recurring cuts totaling $150 million.  And its claim that it did achieve $120 million in permanent cuts is suspect.

In 2012, for instance, the County closed not four police stations, as they budgeted, but only three.  In addition, the County’s claim that police station consolidations would achieve $18 million in annual savings has not materialized.  In fact, police overtime in 2013, year to date, versus the same period in 2012, is up $16 million.

Then there is the County’s absurd claim that it incurred a $41.5 million budgetary surplus in 2012.  The County came up with that number based on the fact that they failed to pay some current bills in 2012 and paid others by borrowing money.  For example, $88 million in tax cert refunds were not paid in 2012 but were pushed into fiscal 2013.  Also, there was an unbudgeted use of $10 million in reserves in 2012 and the use of $67.8 million in long-term borrowing to pay current bills such as termination payments.

These practices are like using one’s credit card to make current mortgage payments on one’s home and then making minimum payments on the credit card balance for the next thirty years.

The analysis of the 2012 budget based on Generally Accepted Accounting Principles (GAAP) reveals that the County incurred an $85.5 million deficit.

For this year, as of June 30, 2013, the GAAP deficit is projected to be $164 million.

Obviously, the County has learned nothing since the control period began two and a half years ago.  This may explain why the County’s ratings have been downgraded and may very well be downgraded again.

The County continues to kick the can down the road despite the County Executive’s statement to Meredith Whitney, author of Fate of the States, on July 3, 2012, “This ‘kick the can down the road’ policy has to stop.”

If the County is ever to get its fiscal house in order, officials must heed the recent comments of two people:

Kevyn Orr, Detroit’s Emergency Manager, gave this advice on July 22, 2013, to local officials with fiscal problems:  “Delay doesn’t produce positive outcomes.  So, whatever the problems are, deal with them.  Have the political will, the wherewithal, to deal with them now.”

Governor Andrew Cuomo, sitting between the Nassau and Suffolk County Executives in Albany on July 19, 2013, said:

“The difference between communities that thrive and communities that die is leadership.”

In other words, for Nassau to succeed there must be the will to govern.  Governing by press release will not cut it.

As for today’s motion—I remind the County of my words in December 2011 “that approval of a plan is not approval of all the parts.” 

Today I vote yea for this small sliver of the tax cert refunding plan because they did come up with some permanent cuts.  But if the County continues its fiscal shenanigans it cannot assume my support in the future.