Office of the Nassau County Comptroller

Mineola - Nassau County is headed in the right direction in 2002 but is far from out of the financial woods because of risks associated with as-yet unresolved labor disputes and metropolitan area economic conditions. That's the conclusion reached by Nassau County Comptroller Howard S. Weitzman, following his office's analysis of revenue collections and obligations for the first four months of 2002.

In a financial report issued today, the comptroller's office projects that Nassau County will run between a $9.4-million surplus and a $18.8-million deficit this year, depending on the outcome of labor disputes. In addition to the uncertain resolution of the labor issues, a recent discovery by the comptroller's office and the county's Office of Management & Budget that the Gulotta administration overstated prior years' Medicaid revenues received from New York State has added to the county's fiscal woes, according to Weitzman.

If police officers receive a zero-percent increase in wages in 2002 -- as assumed in the Suozzi administration's Quarterly County Budget Report -- the county may end the year with a surplus of $9.4 million, according to the comptroller's office. Any settlement with the police unions that includes wage increases comparable to those of neighboring Suffolk County would create a deficit. Police contracts patterned after an arbitrator's award earlier this year in Suffolk County would cost the county $28.2 million this year, and this would result in a deficit of $18.8 million, the report notes.

This forecast assumes that 200 or more police officers will leave the force in 2002 at a cost of $44.7 million, compared with the county's expectations of 160 police officers at a projected termination cost of $36 million. The comptroller's office forecast is based on the following premises: (1) overtime resulting from the September 11 terrorist attack on the World Trade Center has greatly enhanced retirement benefits for many police officers; and (2) the uncertainty associated with the labor agreements may motivate many officers to retire earlier than anticipated.

Of particular concern, said Weitzman, is the impact on the county's police district fund of escalating overtime costs, termination pay and potential wage settlements. This fund is financed by separate taxpayers and cannot be subsidized by the county's general fund.

The Gulotta administration's overstating prior-years' Medicaid revenues received from New York State also will adversely impact the county's financial condition. From fiscal year 1996 forward, the county's department of social services incorrectly recorded certain Medicaid advances from the state as revenues, rather than as monies to be repaid, according to Weitzman.

"Unfortunately, this adds an unanticipated $12 million to the county's financial problems," said Weitzman. "At best, this stems from sloppy bookkeeping and lack of controls. At worst, this is another example of inflated revenues having been used to mask the county's deteriorating financial condition." To address this problem, the county will have to set aside $12 million in reserves against its opening fund balance for fiscal year 2001- funds that were designated for other purposes in FY'02, he said.

The continued decline of the New York City economy also poses a growing risk to the budget, according to Weitzman. Labor-market conditions in the county appear to have stabilized, while sales-tax revenue growth - a proxy for retail sales - also is signaling a recovery. However, as noted in the comptroller's report, the strength of the county's economic recovery is inextricably linked to the performance of the city's economy since many county residents work in the city. Continued job losses there, with their attendant impact on consumption and sales-tax revenues here, could adversely affect the county's economy and exert further pressures on the budget.

" Many of the necessary operational actions taken by the Suozzi administration have begun to bear fruit," maintains Weitzman. "As a result, the county is likely to end 2002 with a small surplus. However, because the county does not have a significant financial cushion, we remain concerned about the potential impact on the budget of collective-bargaining settlements, termination costs associated with police retirement, the rising cost of police overtime and a slower-than-anticipated economic recovery in 2002." The comptroller believes the Suozzi administration should develop a contingency plan to deal with these potential problems.

Nassau County Finances Headed in Right Direction

But Far From Out of the Woods,
Comptroller Reports Inflated Prior Years' Revenues
Create New $12-Million Financial Hole

Nassau County Finances Headed in Right Direction

But Far From Out of the Woods, Comptroller Reports Inflated Prior Years' Revenues Create New $12-Million Financial Hole

But Far From Out of the Woods,
Comptroller Reports Inflated Prior Years' Revenues
Create New $12-Million Financial Hole