New York's Nassau County closed 2015 with a $58.2 million budget surplus driven mainly by borrowing for property tax refunds and police termination pay, according to a new report issued by County Comptroller George Maragos.
Nassau borrowed $122.3 million for operating expenses last year, a practice that Maragos cautioned against in his report released Monday pointing to how despite ending 2015 with a surplus, the county still has a $141.9 million structural gap. The borrowing, which was approved by the Nassau County Legislature and the Nassau Interim Finance Authority, also helped lead to an estimated budgetary fund balance of $164.2 million, a $43.2 million increase from 2014.
"The use of borrowing to fund the County's operations and boost reserves cannot be condoned," said Maragos in a statement. "Nevertheless, the increase in the budgetary fund balance to $164 million increases the County's resilience and should lessen its reliance on borrowing to cover operating expenses."
Maragos noted recurring revenues were lower than budgeted for 2015 by $78.3 million and recurring expenses were higher by $63.6 million. This was offset by $33.5 million in "one-shot revenue items", $44.3 million in "expense reduction opportunities" and $122.3 million in operating expenses paid for with borrowings, Maragos said.
Nassau issued $198.5 million in serial bonds to fund operating expenses and capital projects. Maragos noted that this borrowing was offset by maturities and refinancing of debt issued by NIFA, which has controlled the county's finances since 2011.
Nassau County Executive Ed Mangano, who has held office since January 2010, responded to the Maragos report by pointing out he did not over exceed borrowing last year despite lagging sales tax collections.
"Good management turned a projected $70 million sales tax deficit into a $58 million surplus while spending less than the County did in 2009 and borrowing less than the County did in 2015," said Mangano in a statement.
Nassau County had a population of around 1.3 million in the 2010 Census and is rated A2 by Moody's Investors Service.
