Nassau County Comptrollers Office

Declaring that Nassau County is in good fiscal health, Comptroller Howard S. Weitzman said today that the county ended its 2005 fiscal year with a surplus of $78.5 million, its fourth annual surplus under the Suozzi administration.

Nassau’s budget surplus was confirmed in the county’s 2005 Comprehensive Annual Financial Report (CAFR), which Comptroller Weitzman released today. The report is audited by Deloitte & Touche LLP, an independent certified public accounting firm.

"The achievement is all the more remarkable considering that last year also marked the third consecutive year with no county tax increase," Comptroller Weitzman said. "When we remember where we started in 2002, with the county close to financial collapse and staggering under the weight of its debt, we obviously have made an impressive recovery.

"In 2005," he said, "Nassau continued to budget conservatively, exercise smart management, control labor costs, and avoid fiscal gimmicks. These factors, in addition to certain one-time revenues and the prudent use of annual surpluses to establish reserves for future budget relief, contributed to the county’s string of budget surpluses since 2002 – and its 11 bond upgrades during that time."

The county continued its practice of reserving surplus funds to reduce future budget deficits in 2005, allocating $50 million to make refund payments to property taxpayers who successfully challenge their assessments. Under Nassau County Interim Finance Agency (NIFA) rules, the county is no longer permitted to issue debt to pay for property tax refunds, except for $15 million in 2006 and $10 million in 2007. Another $24.8 million was added to reserves for pension contributions, and $3 million was reserved for payment of judgments and settlements.

Despite the surpluses, Comptroller Weitzman cautioned about the increasing difficulty of balancing Nassau’s budget in the coming years. "Nassau is a mature suburb with little room to grow. As a result, county revenues are relatively flat, while expense increases are inevitable. In such an environment, we must be aggressive about containing costs and vigorously pursue additional revenue opportunities, such as the redevelopment of the Nassau Coliseum property (Nassau Center) and downtown redevelopment projects."

The county’s growing liability for retiree health benefits is "a critical financial challenge," Comptroller Weitzman said. "It has been estimated that this liability may be as high as $4 billion in current dollars." To determine more precisely the actual liability, as required under a recently enacted standard of the Governmental Accounting Standards Board (GASB), the county is hiring an actuarial consultant.

"With such a tremendous liability, the county needs to take advantage of every opportunity to contain the growing cost of health benefits. One relatively easy way of reducing the liability is for the county to adopt my plan on health benefits for employees who are married to each other."

The Comptroller issued a report in June finding that Nassau County could save more than $3 million a year, and more than $28 million over the next five years, by not giving two health insurance policies to married couples when both spouses are county employees or retirees.

Sales tax revenue grew by a disappointing 1.5 percent in 2005 to approximately $953 million, nearly $11 million below budget. "Sales tax is a key uncertainty going forward, as it represents 40 percent of the county’s annual revenues. If the regional economy takes a significant downturn, the county would be vulnerable," Comptroller Weitzman said.

On a more positive note, the county made significant progress during 2005 in addressing one of the greatest risks to its long-term financial recovery by reducing its backlog of property tax grievances to the lowest level in 20 years. The outstanding liability for such refunds was reduced from $400 million in 2001 to $131 million in 2005 – $100 million better than the $231 million target Comptroller Weitzman set in 2004. In addition, new liability for property tax refunds was reduced 46 percent from $99 million in 2001 to $53 million in 2005.

"Reducing the property tax refund backlog will, over time, help reduce the county’s structural deficit," Comptroller Weitzman said. "It is incumbent on the county, however, not to let that liability grow significantly, since it now makes these payments out of operating funds, as required by the legislation that created NIFA.

"Looking forward," he concluded, "although the county successfully managed its way to a fourth consecutive annual surplus in 2005, the financial challenges represented by growing structural deficits will only increase. Next month, the Comptroller’s Office will issue its annual assessment of the county's financial condition at mid-year, which will forecast the likelihood of the county achieving a surplus in 2006."

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 can be accessed with the link below. It also will be available in a CD-ROM version. Copies may be obtained by calling the Comptroller’s communications unit at 571-2677.

COMPTROLLER WEITZMAN CONFIRMS COUNTY’S
FOURTH ANNUAL BUDGET SURPLUS SINCE 2002

Comptroller Cautions About Growing Cost of Retiree Health Benefits

COMPTROLLER WEITZMAN CONFIRMS COUNTY’S FOURTH ANNUAL BUDGET SURPLUS SINCE 2002

Comptroller Cautions About Growing Cost of Retiree Health Benefits

COMPTROLLER WEITZMAN CONFIRMS COUNTY’S
FOURTH ANNUAL BUDGET SURPLUS SINCE 2002