NIFA to Nassau County: Cut $100 million in spending

The state monitoring board that controls Nassau’s finances will require the county to cut about $100 million in spending in its 2018 budget to close a projected budget deficit.

Officials in the administration of Nassau County Executive Edward Mangano said the cuts would require the “elimination of important services” and “force massive layoffs.”

The Nassau Interim Finance Authority board told Eric Naughton, Nassau’s deputy county executive for finance, in a letter on May 30 that county departments must submit “detailed plans” in the next 45 days to reduce annual spending by 7 percent from 2017 levels.

The county plan must detail programs and services, along with full- or part-time positions that will be eliminated or scaled back to reduce spending before Mangano submits his 2018 budget on Sept. 15.

“We recognize that the county’s elected officials have the responsibility to shape fiscal and programmatic policy,” the NIFA board wrote. “However, 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.”

Naughton said a $100 million cut in spending would force the county to eliminate needed services and force Mangano to terminate hundreds of employees — predominantly recent hires making low-level salaries because of union rules that protect veteran staffers from layoffs.

“We need our departments focused on managing their operations, not on an exercise in futility,” he wrote.

NIFA Chairman Adam Barsky said the board was prepared to reject any budget that did not significantly reduce spending. Otherwise, NIFA for the first time will implement cuts, Barsky said.

“We don’t want to have to do that as a first option,” said Barsky. “They are the elected officials and it’s their responsibility to make these decisions.”

But Jerry Laricchiuta, president of Civil Service Employees Association Local 830, the county’s largest public employee union, said NIFA “has to take a step back.” Laricchiuta said staffing in county departments is down, “and we can barely provide services now. It would be impossible to reduce the workforce any more without the residents suffering.”

NIFA, which must approve the county budget, said the multiyear plan for 2017-2020 has an estimated annual gap between revenue and expenditures of more than $80 million and an additional $90 million in risky revenue that may not materialize.

Naughton responded tersely to NIFA in a letter on Thursday. He argued that while the control board projected the county would end both 2015 and 2016 with large deficits, Nassau concluded both years with budgetary surpluses.

NIFA officials say any surplus was achieved through “one-shot” measures such as reserve fund transfers and borrowing money to pay tax refunds and major court settlements. NIFA does not allow the county to use borrowing proceeds or other one-time revenue sources to restore programs or provide tax relief, as such funding isn’t sustainable.

The board has projected a $100 million deficit this year, excluding borrowing, one-time revenue and savings from deferred pension payments. NIFA has directed Nassau to close the gap to $60 million.

Presiding Officer Norma Gonsalves (R-East Meadow) called NIFA’s order “premature, because as a majority, Nassau Republicans have controlled spending and improved county finances in every category over the previous Democrat administration.”

Democratic Minority Leader Kevan Abrahams (D-Freeport) said he supports NIFA’s efforts and suggested Mangano begin by cutting outside legal contracts to save up to $15 million. But he said it would be “inappropriate” for Mangano, who has pleaded not guilty to federal corruption charges and has yet to say if he will run for re-election, to administer layoffs, potentially in his last days in office.

In his letter, Naughton noted that the Wall Street agency Standard & Poor’s recently upgraded the county’s bond rating outlook. He said the county is “constantly looking for cost-saving initiatives,” and cited a recent reduction in social service caseloads and elimination of the decades-old practice of borrowing for tax refunds a year earlier than expected.

Naughton said the NIFA “must provide” Mangano a chance to submit his own 2018 budget before demanding cuts.

“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,” Naughton wrote.

By Robert Brodsky

robert.brodsky@newsday.com@BrodskyRobert

Robert Brodsky is a breaking news reporter who has worked at Newsday since 2011. He is a Queens College and American University alum.