When George Maragos stepped into office as Nassau County comptroller two years ago, he said the state of the county’s financial system was “looking very grim.”
“The county was on the brink of bankruptcy. In the first year we turned that deficit into a surplus,” Maragos said during an exclusive interview with Blank Slate Media last Thursday.
“In the second year now, we are probably going to close 2011 close to break even.”
Whether the county finishes 2012 with a deficit or not, Maragos said is still largely up in the air.
Maragos, who is currently running for the Republican nomination to challenge Democrat Kirsten Gillibrand for her United States Senate seat in November’s general election, said that the Nassau County Interim Finance Authority needs to decide if it will “elect to help the county, as they reported they want to do, or harm the county.”
“The difference of whether we have a deficit or not is going to depend on how they allow the treatment of property tax refunds,” Maragos said. “In the past they would allow up to $70 million to be bonded for and the balance to be paid for operating. So far, they have not allowed us to bond any portion of the property tax refund.”
“If in fact they continue that policy,” he added, “they can create a deficit of maybe $40 or $45 million.”
NIFA took control of the county’s finances last year, citing a potential $176 million gap in Nassau’s 2011 budget.
The county budget for 2012 is now slated at $2.6 billion dollars and does not include a property tax increase for the third straight year, Maragos said.
Maragos said even with NIFA’s help, the county faced a $300 million deficit in 2012. He said the county responded to these projections with a series of cuts and the reorganization of county departments including the recent proposal by Nassau County Executive Edward Mangano to reduce the number of the police precincts from eight to four.
“The 2012 budget certainly has a lot of risk associated with it, but there are opportunities as well, such as the police consolidation, the layoffs, etcetera to derive the savings that are in the budget for 2012,” he said.
Maragos said he has consulted extensively with Mangano on the financial impact of budget decisions, but has not been involved in policy decisions.
Maragos said that one of the biggest risks to the 2012 budget is an increase in state-mandated costs. He said that the county has seen a nearly 60-percent increase in state pension contributions, along with about a 30-percent increase in health insurance costs.
“Although we’ve made significant progress in streamlining government and reducing expenses, we’re seeing this unfunded mandate cost just exploding,” Maragos said. “It’s a big issue that no matter what we do at the local level, not only Nassau County, but any local government. Ultimately it is going to bankrupt us, especially if the economy doesn’t improve,”
But Maragos said that through several county initiatives, Nassau’s finances should be stable in 2012.
Maragos said Mangano’s police precinct consolidation plan, which would see four of the department’s eight precinct changed into community policing centers, could save Nassau up to $20 million in 2012.
“On the basis of what they’re proposing to do, to cut down the staff and retirements, the savings from those people that are in an administrative capacity, then the numbers do work out to about $20 million for a full year,” Maragos said.
He said he and Mangano are closely monitoring the county’s finances and they are prepared to make further cuts if the county faces a deficit.
The county has also put directives in place for its process in “getting value for the money it spends” in its contracts, Maragos said.
“Does this contract represent value to the county? What is that value that we’re getting?” Maragos said. “We’ve stopped just automatic renewals of contracts. We’ve said periodically every three to five years you must go out and re-bid contracts, as opposed to just renewing them from vendors.”
An increase in sales tax revenue of 3.7 percent for 2012 could also mean good things for the county in the coming year, Maragos said.
“If we assume another growth over that of maybe 3 percent next year, hopefully we’ll do better than that, that’s going to bring in another $30, $40 million in additional unanticipated revenues,” he said.
