Nassau County Comptrollers Office

Providing more evidence of Nassau County's new-found fiscal strength, Nassau County Comptroller Howard S. Weitzman said today that the county ended its 2004 fiscal year with a surplus of $19.5 million, its second consecutive year showing such a surplus not dependent on "one-shot" revenues.

The surplus had been projected to be $76.8 million before the county set aside $57.3 million to establish reserves to provide future budget relief. The numbers are contained in the county's 2004 Comprehensive Annual Financial Report (CAFR), which Comptroller Weitzman released today. The report is audited by Deloitte & Touche LLP, an independent certified public accounting firm.

"A few years ago Nassau County was teetering on the brink of insolvency," Comptroller Weitzman said. "Our annual report for 2004 shows that, although some financial challenges still remain, our fiscal recovery is well established and comprehensive.

"As it did one year ago, the county has wisely chosen to use most of the surplus to reduce anticipated budgetary stresses in future years. I concur with County Executive Suozzi's decision and his conservative budgeting philosophy," Comptroller Weitzman said.

"It is noteworthy that these excellent results were achieved with no tax increase in 2004," he added. "This was possible thanks to a combination of cost-cutting by the administration, sensible labor settlements and pension aid from New York State. This also marks the second consecutive year in which Nassau County achieved a budget surplus without the aid of "one-shots" (non-recurring revenues and cost reductions). Although there are always some one-time revenues in any budget, once again in 2004 the county would have had a surplus without them."

In 2004, one-shots included $16.6 million of NIFA debt restructuring savings and transitional aid, $31.5 million from the release of reserves for extraordinary police termination pay, $9.1 million from the settlement of disputed liabilities through the NHCC stabilization agreement and $3.3 million from the BPA stipulation settlement.

After the discretionary actions to earmark funds for future budgetary relief, the remainder of the 2004 surplus, $19.5 million, will be added to the accumulated fund balance in the General Fund ($9.5 million), and to a special fund for future debt service payments ($10 million).

Despite the county's fiscal health in 2004-2005, Comptroller Weitzman cautioned that "more work needs to be done to manage future structural deficits." Such deficits occur when revenue growth is stagnant and expenses continue to rise, "which, unfortunately, continues to be the case in Nassau as it is in most other mature counties in New York State," he said.

Nassau County achieved a long-sought goal in 2005 when Albany acted to restrain the costs of Medicaid that New York passes down to every county. "We have also stabilized the Nassau Health Care Corporation, which runs Nassau University Medical Center," Comptroller Weitzman said, "which had been one of the biggest threats to the county's financial recovery." The county supported the creation of NHCC in 1999 by guaranteeing $256 million worth of the public benefit corporation's debt.

But other challenges remain, the Comptroller said, including the need to pay for real estate tax refunds out of current revenues rather than by borrowing. Except for $15 million in 2006 and $10 million in 2007, the county can no longer borrow for property tax refunds after this year. Such borrowing had been the county's practice for many years, contributing to the county's financial crisis in the late 1990s.

"I also continue to be concerned about the county's revenues from the sales tax," Comptroller Weitzman said. "Receipts from sales tax, which is currently budgeted at $964.7 million for 2005, represent the county's largest single revenue source. As a result we are increasingly vulnerable to any slowdowns in retail sales growth. Growth in sales tax revenues began trending lower - i.e., the rate of growth is slower - in the second quarter of 2004 and is flat for the first five months of 2005. Dealing with all these challenges will require strict adherence to the county's newfound conservative budgeting philosophy."

The annual report received a "clean opinion" from Deloitte & Touche, signifying that the accounting firm found no unresolved issues that would qualify its assessment. The full report may be viewed and downloaded from the Comptroller's Web site. It is also available for the first time in a CD-ROM version. Copies may be obtained by calling the Comptroller's communications unit at 571-2677.

NASSAU ANNUAL REPORT CONFIRMS SECOND ANNUAL BUDGET SURPLUS NOT DEPENDENT ON ONE-SHOT REVENUES