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Maragos issues deficit warning for 2012

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Posted: Thursday, July 19, 2012 1:41 pm

Nassau County Comptroller George Maragos warned last week that the county could end the 2012 fiscal year with a $45 million budget deficit after announcing on Friday that the county had finished 2011with a $50.4 million deficit.

Maragos blamed the refusal of the Nassau County Interim Finance Authority and Democrats in the county Legislature to approve the bonding of $43.1 million in bonding for property tax refunds for the nearly $51-million deficit in 2011 during a press conference at his Mineola office.

“Similarly, the projected $45 million deficit in 2012 is partially the result of the anticipated failure of NIFA and the legislative minority to again approve the 2012 budgeted bonding for tax refunds,” said Maragos, who is a Village of Russell Gardens resident. “This ongoing lack of cooperation will continue to negatively affect the county.”

Last month, the county Legislature’s Democratic caucus did not provide the votes necessary to approve Nassau County Executive Edward Mangano’s plan to bond $41 million to pay for property tax refunds in 2011.

For any borrowing to be approved, the 19-member Legislature must support the proposal by a two-thirds majority.

With Republicans holding a 10-9 majority, that would mean at least three members of the Democratic caucus would have to cross party lines for any borrowing approval.

Democrats in the Legislature have previously indicated they would not support any further borrowing to pay for property tax refunds until an agreement is made with Republicans for what they called “fairer” redistricting plans for the county’s legislative districts.

Minority Leader Kevan Abrahams (D-Freeport) said last week’s announcement by Maragos is another example of Mangano failing to achieve savings in the county budget.

“He has given out tens of millions in crony contracts and wasted millions on baseless lawsuits,” Abrahams said of Mangano in a written statement. “Overtime in the county under his watch has run amok. He went back on his word to the youth and seniors in the county by cutting their funding and he has consistently begged the Legislature over and over to bail him out by borrowing and creating more and more deficits for years to come.”

On July 5, more than 53 of the county’s social service agencies shut down their summer programs following the county Legislature’s failure last month to come to terms on an agreement to provide $8 million in funding to save the programs.

Of the county agencies to lose funding, 40 were youth social service programs, while 13 were mental health and chemical dependency coalitions.

Funding for the 40 youth service agencies was previously made available through revenue from the county’s red-light camera program.

Mangano said last month that the social service agencies would lose their funding if the county Legislature did not approve the borrowing Nassau’s 2011 property tax refunds.

“Of course with this type of blatant fiscal mismanagement, (Mangano) will end the year in a $50-million deficit,” Abrahams said. “I am surprised it’s not more.”

Abrahams said the only real savings the county has earned this year cannot be attributed to Mangano’s adminstration. 

“The only real savings (Mangano) was able to achieve was due to the wage freeze imposed by NIFA, which he initially fought,” Abrahams said.

The county has also received savings from an increase in its sales tax revenue, but it won’t be enough to pull the budget out of its deficit, Maragos said.

“We were projecting approximately a 3 percent sales tax increase,” the county comptroller said. “We’ve increased that projection now to 5 percent, so that added approximately $20 million.”

But, with the expectation that Mangano will not receive cooperation from NIFA and the county Legislature’s Democratic caucus on his administration’s bonding request, Maragos said the county executive should look to other cost-cutting methods to avoid a deficit in 2012.

“I urge county executive Mangano to take immediate steps to cut costs and raise non-tax revenues in order to end 2012, not only in balance, but with a surplus in order to replenish the county’s fund balance,” Maragos said.

By targeting $90 million in savings and restoring the unreserved fund balance to its 2010 levels, the county should be able to begin to take steps to avoid a deficit in 2012, Maragos said.

“On a cash-flow basis we are very healthy and that’s something we are continuously monitoring, but again if these steps aren’t taken then, as I indicated, we will be adding $50 milion to $60 million to the fund reserve of the county,” Maragos said.

Although the county is facing a situation where it could again have a deficit in 2012, Maragos said it still is possible for Nassau’s finances to improve this year.

“Managing to close a $30 million or $45 million projected budget deficit at this time of year should not be an insurmountable task,” the county comptroller said. “It should be doable and again it will be done with zero borrowing for property tax refunds.”

 

Reach reporter John Santa by e-mail at jsanta@theislandnow.com or by phone at 516.307.1045 x203

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