Nassau County advances bond deal to fund tax settlement debt
Nassau County, New York, is pushing forward with a borrowing plan to tackle a backlog of refunds it owes taxpayers.
The Long Island county’s Republican-controlled legislature on Nov. 19 approved Democratic County Executive Laura Curran’s proposal to issue $100 million of bonds in December to fund a portion of $360 million in tax settlement debt. The county is also planning to issue up to $200 million of bonding in 2019 toward the tax claims that are accruing interest.
The $100 million would cover 18,914 tax settlements accepted from Dec. 1, 2015 to Dec. 31, 2016. The borrowing measure still needs approved from the Nassau Interim Finance Authority, which is slated to vote on the proposal Tuesday night.
Mark Page, Nassau’s deputy county executive for finance, said he has had numerous discussions with NIFA and expects the state fiscal control board to approve of the borrowing since it will be part of a larger plan aimed at improving the tax assessment process. Page, a former New York City budget director, said creating a more fair assessment process will make the county less subject to grievances.
“This deal is an important part of the Nassau County executive getting control of the property tax administration in the county,” said Page. “You need to get control of what has been an out of control cost to the country.”
Curran has pitched a $3.5 billion budget proposal for 2019. The county has nearly $1 billion of total tax settlement debt.
Curran sought state legislation in June that would raise NIFA’s debt ceiling and permit the fiscal control board to issue $400 million of bonds for the tax liabilities instead of the county. The proposal stalled in Albany after the legislature did not advance a requested home-rule vote. Page said he is hopeful the proposal can be revisited because it would enable the county to save on borrowing costs with NIFA's has triple-A bond ratings.
Nassau, which is New York State’s sixth most populous county, is rated A2 by Moody’s Investors Service, A by Fitch Ratings and A-plus by S&P Global Ratings. It has $2.3 billion of outstanding general obligation debt, according to Fitch.
If Nassau receives NIFA approval, Page said the county would market the bonds in conjunction with another $100 million of borrowing planned next month for capital improvement projects. He said the county is also slated to soon issue $200 million of bond anticipation notes and $380 million in tax anticipation notes.