Post by oscarthomas on Oct 27, 2011 21:57:46 GMT -5
Nassau's financial control board has reversed itself and will allow County Executive Edward Mangano to borrow $450 million over the next four years to help him transition to a balanced budget, officials said Thursday.
The Nassau Interim Finance Authority has agreed to permit the county to borrow $305 million to fund property tax refunds, $65 million for court judgments and $80 million in termination pay. The amounts will decrease annually until 2015, when Mangano is expected to bring Nassau's budget into structural balance, which means recurring revenues match recurring expenses, officials said.
In return, the state-appointed board will remain in control of Nassau's finances and continue a wage freeze while Mangano cuts $150 million in labor costs next year. If unions do not agree to voluntary concessions, the county will institute layoffs and unpaid furloughs to save that amount, officials said.
Mangano and NIFA chairman Ronald Stack reached a deal last weekend and submitted details of the multiyear financial plan to the county legislature Thursday. Both Mangano and Presiding Officer Peter Schmitt (R-Massapequa) have pledged they will not increase property taxes to balance the county budget, which is projected to have a deficit as high as $300 million next year.
"The plan achieves fiscal stability by advancing a set of stringent guidelines developed by my administration, in cooperation with NIFA," Mangano said in a statement. "Through common-sense solutions and shared sacrifice, Nassau County will pay off decades of old debt, live within its means and protect already over-taxed residents."
Stack referred comment to NIFA member Chris Wright, who said the board cannot approve the deal until the legislature approves it.
"If and when NIFA approves of a plan with those elements, it will come with strict controls over borrowing, spending and capital projects," Wright said. "Since such budgets will not be statutorially balanced, it would require NIFA to continue its control period for the next four years. We would also require that any budgetary upside be used to reduce those borrowings, not increase spending."
Schmitt declined to comment until he could review the plan. Minority Leader Diane Yatauro (D-Glen Cove) said, "Once again the Republicans and their irresponsible tax and spending habits have to be bailed out by NIFA."
Legis. Judy Jacobs (D-Woodbury), who lobbied for the creation of NIFA in 2000 to help the county through a fiscal crisis, said, "It reminds me of the old way -- borrowing and borrowing and not finding the answers right up front."
The county would be limited to borrowing $95 million for refunds and $25 million for judgments this year, with the amounts decreasing each following year. The county can borrow a total $80 million in termination pay this year and next with no borrowing for that expense after 2012.
Until now, NIFA had refused to let Mangano borrow to pay tax refunds even though it permitted the former Democratic administration of Thomas Suozzi to borrow at least a portion of those costs, which have averaged $100 million a year for more than a decade.
The Nassau Interim Finance Authority has agreed to permit the county to borrow $305 million to fund property tax refunds, $65 million for court judgments and $80 million in termination pay. The amounts will decrease annually until 2015, when Mangano is expected to bring Nassau's budget into structural balance, which means recurring revenues match recurring expenses, officials said.
In return, the state-appointed board will remain in control of Nassau's finances and continue a wage freeze while Mangano cuts $150 million in labor costs next year. If unions do not agree to voluntary concessions, the county will institute layoffs and unpaid furloughs to save that amount, officials said.
Mangano and NIFA chairman Ronald Stack reached a deal last weekend and submitted details of the multiyear financial plan to the county legislature Thursday. Both Mangano and Presiding Officer Peter Schmitt (R-Massapequa) have pledged they will not increase property taxes to balance the county budget, which is projected to have a deficit as high as $300 million next year.
"The plan achieves fiscal stability by advancing a set of stringent guidelines developed by my administration, in cooperation with NIFA," Mangano said in a statement. "Through common-sense solutions and shared sacrifice, Nassau County will pay off decades of old debt, live within its means and protect already over-taxed residents."
Stack referred comment to NIFA member Chris Wright, who said the board cannot approve the deal until the legislature approves it.
"If and when NIFA approves of a plan with those elements, it will come with strict controls over borrowing, spending and capital projects," Wright said. "Since such budgets will not be statutorially balanced, it would require NIFA to continue its control period for the next four years. We would also require that any budgetary upside be used to reduce those borrowings, not increase spending."
Schmitt declined to comment until he could review the plan. Minority Leader Diane Yatauro (D-Glen Cove) said, "Once again the Republicans and their irresponsible tax and spending habits have to be bailed out by NIFA."
Legis. Judy Jacobs (D-Woodbury), who lobbied for the creation of NIFA in 2000 to help the county through a fiscal crisis, said, "It reminds me of the old way -- borrowing and borrowing and not finding the answers right up front."
The county would be limited to borrowing $95 million for refunds and $25 million for judgments this year, with the amounts decreasing each following year. The county can borrow a total $80 million in termination pay this year and next with no borrowing for that expense after 2012.
Until now, NIFA had refused to let Mangano borrow to pay tax refunds even though it permitted the former Democratic administration of Thomas Suozzi to borrow at least a portion of those costs, which have averaged $100 million a year for more than a decade.
