Post by backdoorit on Jul 29, 2014 13:46:37 GMT -5
County Comptroller George Maragos projected Tuesday that Nassau will end the year with a nearly $77 million cash deficit primarily due to a steep decline in sales tax revenues and increasing costs of police overtime.
Maragos also said in his midyear budget report, which is required by the county charter, that the difference between recurring revenues and recurring expenses, the so-called structural budget gap, will increase to $242 million by the close of 2014.
Maragos, a Republican, said fellow Republican County Executive Edward Mangano and the county's financial control board, the Nassau Interim Finance Authority, must take "immediate steps" to close the deficit to "avoid the unpleasant consequences that will arise from our projections, should they be allowed to materialize."
Tim Sullivan, Mangano's deputy county executive for finance, said the administration already has submitted a plan to NIFA to reduce overtime spending through "management initiatives" and to cut funds budgeted for supplies, equipment and contractual expenses.
The administration had raised questions about the accuracy of the state's allocation of sales tax revenues, after Nassau's collections dropped by 9 percent through June compared with the same period last year.
Sullivan said the county has asked for proposals from an independent economic consultant to review the sales tax data. Responses are due Monday. The consultant, who is expected to be paid less than $24,750, must submit a report by Sept. 5.
The county charter requires Mangano to submit his proposed 2015 budget on Sept. 15.
Maragos projected that police overtime will cost $67.4 million this year compared to $50 million budgeted. He also predicts a $90 million shortfall in sales tax revenues, which he said reflects lower economic activity after a surge in spending after superstorm Sandy in 2012 and the shift to online shopping.
NIFA recently lifted a three-year wage freeze on four of the county's five major unions after they negotiated new contracts that the administration and labor leaders said will save tens of millions of dollars in future years. NIFA is expected to approve a new deal for county correction officers next month.
While the county says the deals will save money in the long run, NIFA chairman Jon Kaiman asked Nassau to develop new revenues to cover immediate costs projected at about $130 million over four years.
Sullivan, in a memo to NIFA, said some of those initiatives, such as new speed cameras in school zones and increased fees, are helping to close this year's projected deficit. The county also expects to borrow to pay $25 million in police termination costs and $75 million in tax refunds before a new commercial refund system takes effect in 2017.
Kaiman could not be reached immediately for comment.
NIFA member Chris Wright, who warned that the new union deals would cost more than anticipated, called Maragos' projected $76.9 million cash deficit "unfortunate, but not surprising. It's exactly what was to be expected -- and was predicted by objective analysts -- when the county added substantially to its cost base in the face of declining revenues. That the county did so with NIFA's approval compounded the error."
Wright added, "Double and triple counting amounts from other efforts isn't a plan, and borrowing for operating expenses is a bad plan, which is also completely contrary to NIFA guidelines passed unanimously last fall by the current board."
Wright was the lone NIFA board member to vote against the four union deals approved so far.
Maragos also said in his midyear budget report, which is required by the county charter, that the difference between recurring revenues and recurring expenses, the so-called structural budget gap, will increase to $242 million by the close of 2014.
Maragos, a Republican, said fellow Republican County Executive Edward Mangano and the county's financial control board, the Nassau Interim Finance Authority, must take "immediate steps" to close the deficit to "avoid the unpleasant consequences that will arise from our projections, should they be allowed to materialize."
Tim Sullivan, Mangano's deputy county executive for finance, said the administration already has submitted a plan to NIFA to reduce overtime spending through "management initiatives" and to cut funds budgeted for supplies, equipment and contractual expenses.
The administration had raised questions about the accuracy of the state's allocation of sales tax revenues, after Nassau's collections dropped by 9 percent through June compared with the same period last year.
Sullivan said the county has asked for proposals from an independent economic consultant to review the sales tax data. Responses are due Monday. The consultant, who is expected to be paid less than $24,750, must submit a report by Sept. 5.
The county charter requires Mangano to submit his proposed 2015 budget on Sept. 15.
Maragos projected that police overtime will cost $67.4 million this year compared to $50 million budgeted. He also predicts a $90 million shortfall in sales tax revenues, which he said reflects lower economic activity after a surge in spending after superstorm Sandy in 2012 and the shift to online shopping.
NIFA recently lifted a three-year wage freeze on four of the county's five major unions after they negotiated new contracts that the administration and labor leaders said will save tens of millions of dollars in future years. NIFA is expected to approve a new deal for county correction officers next month.
While the county says the deals will save money in the long run, NIFA chairman Jon Kaiman asked Nassau to develop new revenues to cover immediate costs projected at about $130 million over four years.
Sullivan, in a memo to NIFA, said some of those initiatives, such as new speed cameras in school zones and increased fees, are helping to close this year's projected deficit. The county also expects to borrow to pay $25 million in police termination costs and $75 million in tax refunds before a new commercial refund system takes effect in 2017.
Kaiman could not be reached immediately for comment.
NIFA member Chris Wright, who warned that the new union deals would cost more than anticipated, called Maragos' projected $76.9 million cash deficit "unfortunate, but not surprising. It's exactly what was to be expected -- and was predicted by objective analysts -- when the county added substantially to its cost base in the face of declining revenues. That the county did so with NIFA's approval compounded the error."
Wright added, "Double and triple counting amounts from other efforts isn't a plan, and borrowing for operating expenses is a bad plan, which is also completely contrary to NIFA guidelines passed unanimously last fall by the current board."
Wright was the lone NIFA board member to vote against the four union deals approved so far.
