Nassau County budget proposal confronts debt challenges
The budget proposal Nassau County Executive Laura Curran released this week aims to tackle debt incurred by the prior administration.
Curran’s $3.5 billion 2019 budget proposal, released Monday, would fund more than $175 million in payments for over $1.1 billion of bonds issued under former county executive Ed Mangano. The spending plan also includes funding for $300 million of bonds to cover part of the county’s nearly $1 billion of past due certiorari payments.
The borrowing plan outlined in Curran’s budget follows a failed attempt by the Democratic county executive to pass legislation that would have allowed the Nassau Interim Finance Authority to instead issue bonds for commercial tax refunds.
NIFA, a New York State fiscal control board that has controlled the county’s finances since early 2011, has triple-A bond ratings from S&P Global Ratings and Fitch Ratings and is rated Aa1 by Moody’s Investors Service. Nassau County will have higher borrowing costs for the bonds due to lower debt ratings of A from Fitch, A2 from Moody’s and A-plus from S&P.
“Nassau County is operating on a bare bones budget,” said Curran, who took office in January. “I am holding each department to a tight fiscal discipline.”
Nassau County has $2.3 billion of outstanding general obligation debt outstanding, according to a Sept. 5 Fitch report. Fitch analyst Amy Laskey noted that the county’s reserves dropped $60 million in 2017 because of its tax refund liabilities, which resulted in the need for revenue anticipation notes slated to be repaid in December. The county is planning to issue $300 million in tax anticipation notes and $80 million of RANs in 2019, according to Laskey.
Curran’s fiscal plan also has infrastructure investments including a new police academy and family court building. The county legislature unanimously approved $154 million of bonds in July that includes $54 million for a new police training center along with other capital improvements and developing a master plan for an opioid treatment center.
Nassau, directly east of New York City, has faced challenges during the current fiscal year combating budget deficits with NIFA identifying $81 million of revenue risks in July. The large suburban county finished the 2017 fiscal year with a negative $68.8 million rainy day fund and $122 million deficit.
Curran’s budget must be passed by the Republican-controlled Nassau County legislature and then receive approval from NIFA, which was founded in 2000. NIFA rejected Nassau’s $2.99 billion 2018 fiscal year budget last December due to uncertain revenue assumptions leading Curran to then submit a revised spending plan in March.