More money for homeless services, risky expenses raised in Nassau County budget review

Nassau County budget and finance officials on Monday defended County Executive Bruce Blakeman’s proposed $4.2 billion 2025 spending plan, but acknowledged challenges that include increased social services spending for needy county residents.

"Government’s obligation is to provide a safety net," said County Comptroller Elaine Phillips, a Republican, during a budget hearing before the legislature's committee on government services and operations. "However, we cannot afford to do this unless we reduce other expenses or raise revenues. We cannot afford to have this type of increase in our budget forever."

The state and federal government reimburse counties for some but not all of their social service costs. Safety net spending has increased sharply over the past six years, Phillips told legislators. She cited increases to safety net spending, which includes cash payments to eligible needy individuals and families, from $27 million in 2019 to $45 million for 2025. Over the same period, Medicaid spending will increase from $243 million to $256 million, she said. Shelter costs increased from $13 million in 2019 to $27 million in 2023, she said.

Her office, which reviewed the 2025 budget proposal, found potential revenue shortfalls, including a possible $25 million budget loss stemming from early intervention and special education programming. Phillips' review cited the potential for higher caseloads due to "the exponential growth of the preschool Education program." Her office also projected a possible $6.2 million shortfall for social service programs.

Also, Nassau's Office of Legislative Budget Review issued a report that identified $165.3 million in possible revenue risks. The county could face a $53.3 million shortfall if members of the county's Civil Service Employees Association are converted back to the state's Empire health plan. The county could also sustain a $42.5 million shortfall by exceeding overtime expenses.

Legis. Siela Bynoe (D-Westbury) said a more robust county approach to social services would ultimately save the county money. For example, the county could be more proactive in spending its share of federal money, including those from the American Rescue Plan Act.

"We have ARPA money, we have opioid money, and we’re sitting on it," she said. But a proposed Jericho shelter for homeless people that would have provided comprehensive support services including life skills and workforce development died amid opposition from Republican lawmakers and neighbors in 2020, she said.

The proposed 2025 budget, which does not include tax or fee increases, could face pressures from a possible recession in the next year, said County Budget Director Andy Persich. Sales tax receipts, a major source of revenue, are projected to remain virtually flat, he said. Persich said that county leaders are also working to rein in police overtime, though some legislators said plans to cut police spending appeared overly optimistic.

"We are starting to see slowness in our revenues," Persich said. "The sizable surpluses we’ve seen in previous years are not going to materialize." Still, he said, "We are in a better place than we’ve been in many years ... It’s a good fiscal position."

Revenues from the proposed Sands casino — a gaming license would guarantee the county $25 million gaming revenue annually — would help "enormously" in closing any budget shortfalls, he said.

Some legislators were skeptical about the use of reserves and ARPA money in the spending plan, but Persich and Phillips said ARPA funds would not be used to balance the 2025 budget.

The OLBR report noted that health insurance and overtime spending will require "careful management ... to contain costs and address revenue declines."

That review noted that the proposed budget’s use of $46.9 million in fund balance and earmarks from some reserves could face objections from the Nassau Interim Finance Authority. The state board has to approve the county's budget and can order revisions.

The full legislature is expected to vote on the proposed budget in the coming weeks.  NIFA will then take it up. If approved, the budget is expected to take effect in January.