Maragos warns of $62 million cash deficit this year in Nassau

Nassau fiscal experts warned Tuesday that the county is facing a budget deficit of as much as $62 million this year and scolded County Executive Edward Mangano and Nassau's financial control board for relying too heavily on borrowing to pay expenses.

County Comptroller George Maragos, who pegged the budget shortfall at $61.9 million, also reported that the structural deficit, which calculates the difference between recurring revenue and expenses, will reach $241.3 million by the end of the year.

Mangano, a Republican, the GOP-led county legislature and the state-appointed control board, the Nassau Interim Finance Authority, "must address the mounting fiscal issues to avoid further weakening of the county financials and unpleasant consequences," said Maragos, a Republican.

"At this stage, major structural changes to county operations and revenue sources will be required. NIFA must participate in this process," Maragos said.

The legislature's independent Office of Budget Review also issued a midyear financial outlook Tuesday, projecting a $56.7 budget deficit by the end of this year.

Budget Review director Maurice Chalmers noted that the 2015 budget relies on $151 million in borrowing to pay property tax refunds, employee termination costs and court judgments while NIFA so far has approved just $60 million.

Maragos also complained that the administration "continues to rely heavily on borrowing to compensate for slowing sales tax revenues and a lack of alternative new revenue sources to meet rising expenditures."

He added, "The oversight by NIFA needs strengthening as the county's fiscal fundamentals have gotten worse under its control."

NIFA took control of the county's finances in 2011. Gov. Andrew M. Cuomo replaced a majority of the NIFA board and its chairman two years ago.

NIFA chairman Jon Kaiman responded, "NIFA is an oversight and control board, not an interim government. NIFA has saved the county hundreds of millions of dollars over the years and will continue to provide guidance, oversight, and control over county budgeting as long as necessary. Our actions, or even our presence, however, do not relieve county officials from their responsibility of fulfilling their fiscal obligations or governmental responsibilities."

Eric Naughton, Mangano's deputy county executive for finance, said in a statement that the administration "has taken proactive measures during the year to ensure that the county will not end the year with a budgetary deficit. We have cut departmental spending, limited the hiring of new personnel and implemented new initiatives to increase revenue."

Naughton added, "Each year the comptroller's office issues a report that states that if no actions are taken the county will have a large deficit. Last year, his office stated that the deficit could be $76.9 million, but instead we ended the year with a $10.7 million surplus."

Maragos and Chalmers said much of the deficit is due to lower revenues after the termination of the school zone speed camera program, the delay in installing video lottery terminals because of community objections and weaker than expected sales tax collections.

They say the drop in revenue has been offset by lower spending on salaries and benefits and eliminating a $13 million subsidy to the Nassau University Medical Center.The legislature's Presiding Officer Norma Gonsalves (R-East Meadow), said, "Both OLBR and the County Comptroller believe that by working together there are opportunities for the Legislature, the County Executive, and NIFA to bring this budget into balance by year end."

All 19 county legislative offices are up for election this fall.