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October 6, 2010

Maragos: Proposed Mangano Budget Slashes Costs to Balance Budget

with No Property Tax Increase

Comptroller labels $258M with above average risk and asks the Administration

 for a 63% reduction in borrowing authorization

            Comptroller George Maragos released his comments on the proposed 2011 Nassau County Budget today at a press conference in Mineola and found that the $2.64 billion budget submitted by the Mangano Administration is balanced. This proposed budget slashes costs and increases non tax revenues by about $343 million, contains no property tax increases and reduces the County structural deficit by approximately 53% from the prior administration 2009 peak of $250 million.

            “The Mangano Administration delivered a balanced budget overcoming an inherited $214 million budget deficit from the prior Administration, while repealing the regressive 2.5% energy tax and the planned property tax increase of 3.9%,” Comptroller Maragos said. “County Executive Mangano deserves credit for making the tough and innovative choices for the benefit of our hard pressed taxpayers.”

            The Comptroller’s report outlines the major hurdles which were overcome in balancing the 2011 budget including:

  • the inherited structural budgetary deficit,
  • double digit health insurance premium increases,
  • double digit pension contribution demands by the state,
  • unfavorable labor agreements, and
  • expense deferrals now coming due.

Meanwhile the County revenue base remains stagnant and major problems continue such as the property tax refund payouts that are bleeding the county, and the lagging of non-tax revenue receipts.

           

            In his report Comptroller Maragos warned against the planned borrowing authorization of $364 million for property tax refunds. The Comptroller recommended that this amount be reduced by 63% to $135 million to pay for only the 2010 and 2011 tax refunds.

            “Borrowing is one of the main reasons the County is in the distressed financial state that it is in,” Comptroller Maragos added. “Some borrowing is necessary but our recommendation would limit borrowing to the minimum necessary.”

            The proposed budget is not without risks similar to prior years’ budgets. The estimated amounts of expense reduction and revenue increases considered at risk are approximately $258 million. Comptroller Maragos rates the risk to achieve these budget gap closing results above average given the magnitude and the support required from multiple constituencies. The budget initiatives, however, are achievable with strong leadership by the Administration.

            The Comptroller stressed that, “the support from Labor Unions, the Nassau County Legislature, State Representatives and NIFA are crucial in order to end FY2011 with a balanced budget. Seventy three percent (73%) of the budget risk items require only local County Legislative approval. Fifteen percent (15%) are within the sole domain of the Administration and require effective management to be achieved. Twelve percent (12%) require State approval and this can be achieved with the support of our local state elected officials. NIFA also needs to do its part to refinance the County debt as appropriate in order to reduce the County’s debt expense by locking in the current historically low interest rates.”

For a copy of the Comptroller’s Comments on the Proposed Nassau County 2011 Budget and Multi-Year Plan report please click below.

PDF File Comptroller's Comments on the Proposed Nassau County 2011 Budget and Multi-Year Financial Plan