A New York State fiscal monitoring board told Nassau County to submit around $100 million in spending cuts to its upcoming 2018 budget.
The Nassau Interim Finance Authority sent a letter to Eric Naughton, the county’s deputy county executive for finance, on May 30 saying departments must submit a detailed plan in 45 days to reduce annual spending by 7% from the current 2017 budget.
Nassau County Executive Ed Mangano is slated to submit his 2018 budget on Sept. 15 that needs NIFA approval. NIFA estimates a gap between revenue and expenditures of more than $80 million for the county’s multiyear budget plan from 2017-2020 along with an additional $90 million in risky revenue assumptions.
“Based on the county’s fiscal outlook, the directors have concluded that county compliance with the NIFA statute will be difficult without meaningful reductions in county spending,” the NIFA board letter to Naughton stated. “Although revenue parameters may be fluid over time, expenditure reduction plans must be designed now to ensure balance under the most conservative forward-looking revenue scenarios.”
NIFA has controlled Nassau County’s finances since 2011 and has rejected past initial budgets due to uncertain revenue assumptions. S&P Global Ratings revised its outlook on Nassau’s general obligation debt to stable from negative in May citing an end to a past practice of issuing bonds to fund tax appeals. The large suburban county is rated A-plus by S&P and A2 by Moody’s Investors Service.
Naughton responded to the NIFA letter stating that while the control board forecasted large budget gaps in 2015 and 2016, the county ended both fiscal years with surpluses. He noted that $100 million in cuts would force “massive layoffs” and due to union rules result in cutting recent hires that have the lowest salaries.
“We have achieved NIFA’s goals of reduced deficits as defined by NIFA, and we are committed to submitting a 2018 proposed budget that is balanced by NIFA’s stringent standards,” said Naughton in his letter. “We have demonstrated in the past that we can deliver budgets that have a combination of expense savings and new revenue in order to maintain service levels.”
