Nassau moves COVID funds, citing fears of federal 'clawback'

Nassau County Executive Bruce Blakeman's request to transfer nearly $270 million in federal pandemic money into the county's general fund — for fear of a federal government clawback — cleared two legislative committees on Monday. 

The unallocated funds are part of $385 million the federal government sent the county over the past two years from the American Rescue Plan Act signed by President Joe Biden in March 2021. They have been kept in a special fund dedicated for their use.

Blakeman's request, approved by the Rules and Finance committees, was a reversal from his administration's previous stance that it did not anticipate being affected by a debt-ceiling bill passed by Congress in early June that included clawbacks. The bill will rescind nearly $28 billion in unspent COVID-19 relief and other federal funds, but a U.S. Treasury official told Newsday that funding that already has been distributed to state and local entities is considered obligated and will not be clawed back.

Nassau budget officials said Monday there has been no communication from the U.S. Treasury about having to return the unused money. But they said they were rattled by passage of the Fiscal Responsibility Act of 2023 two weeks ago.

"If we don't obligate the funds we could lose it. Why would we do that?" said Nassau County Budget Director Andrew Persich. "We haven't decided how we will spend the money yet, but that last House vote scared us." 

Blakeman spokesman Christopher Boyle said his administration "documented over $300 million in lost revenue as a result of the COVID-19 pandemic."

"This money will be used for the purposes for which it was intended, to promote economic development, stabilize taxes and maintain fiscal integrity," Boyle said.

Local governments have been given discretion to use the funds for various needs such as public health, infrastructure projects and replacing lost tax revenue.

Nassau received $385 million in ARPA funds, Suffolk received $286.8 million and 13 towns on Long Island received a total of $262.8 million, according to federal and state data.

Nassau has obligated or spent $85 million of that, Boyle said. 

The funds must be allocated before the end of 2024 and spent by the end of 2026, or they will be returned to the federal government.

Some of the most recent spending has been on economic and tourism efforts.

In early May, Blakeman announced $10 million in COVID-19 funding for small businesses and nonprofits. 

Blakeman, a Republican, said later that month that Nassau would use $600,000 in COVID relief to pay for a two-week tourism promotion campaign that includes a television commercial featuring him. The ad is airing in Ohio, Pennsylvania, Arizona, upstate New York and the metropolitan area as well as on Newsmax, the right-wing news channel, he said at a news conference.

Boyle said the campaign aims to boost the local economy and qualifies for ARPA use.

Suffolk County officials have said they don't expect any clawbacks in COVID funding. Suffolk had obligated $40.5 million as of April.

Also Monday, the 2024 budget proposal for Nassau Community College passed the Rules and Finance committees.

The $185 million budget proposal does not raise student tuition and is 0.7% higher than the 2023 adopted budget.

Enrollment is projected to grow by 2.5% in the 2023-24 academic year. 

NCC officials did not give a full presentation, but a draft of the college's financial projections obtained by Newsday showed a $15.5 million deficit projected to grow to $27.8 million by 2027. 

Legis. Siela Bynoe (D-Westbury), a member of the Rules Committee, said legislators were "teeing up" the vote but would have more questions for college administrators before a final vote by the full, 19-member legislature. 

The next meeting of the full legislature is June 26. 

By Candice Ferrette

candice.ferrette@newsday.comcandiceferrette

Candice Ferrette covers Nassau County government and politics on Long Island. She has been a reporter at Newsday since 2011.