The Nassau Interim Finance Authority approved Nassau County’s $3.3 billion budget for 2021 but included a resolution that requires the county to develop a plan to combat deficits that are projected to “increase significantly” over the next four years due to the coronavirus pandemic.
Directors from the finance authority met virtually on Thursday to discuss, and ultimately approve the budget 4-1, with board member Paul Annunziato being the only one to vote “no”.
“This plan right now isn’t a plan. It lacks any initiatives to address those out years,” Annunziato said. “In short, my conclusion of the county’s budget, it is nothing more than a plan that says, let’s delay and hope. Let’s hope sales tax skyrocket much greater than what we’ve projected.”
The Legislature’s Republican majority approved a deal on Monday that gives the finance authority the ability to refinance county debt as the county struggles with the ripple effects of the coronavirus pandemic.
The county’s proposed $3.3 billion budget for 2021 calls for NIFA, which has overseen the county’s finances for the past two decades, to refinance $473 million in county debt, according to a county news release.
Earlier in the year, a plan from Nassau County Executive Laura Curran, a Democrat, featured NIFA restructuring $435 million in debt over 30 years. Majority officials said Curran agreed to reduce the bonds from 30 years to 15.
The new agreement, according to the news release, will save taxpayers over $883 million over 15 years.
“This deal negotiated by the Majority will save Nassau taxpayers hundreds of millions of dollars, and return money back to small business owner and residents, where it belongs,“ Nassau County Presiding Officer Richard Nicolello (R-New Hyde Park) said. “The Majority will continue to stand up for Nassau residents, and fight to lower taxes for working-class families.”
The deal also featured the creation of a “special revenue fund” to ensure that county operations will continue and will assist in paying back residents and businesses owed tax refunds. The fund will consist of surplus monies in any line of the 2021 budget, according to officials.
“That’s good because if sales tax does, in fact, exceed what had been proposed in the adopted budget, it will lessen the need for the county to seek bond authorization and funding authorization as a funding source to pay down the backlog which sits currently at approximately 231 million as of Dec. 31, 2019,” NIFA Executive Director Evan Cohen said Thursday.
Despite the plan, which is projected to save the county $435 million in savings in 2020, 2021, and 2022 fiscal years combined, the county still faces debt that is projected to balloon in those years, according to October projections from the finance authority.
The projections show Nassau County facing a $111.2 million deficit in 2021, $137.3 million in 2022, $285.7 million in 2023, and $359.7 million in 2024.
“This is a budget that is being balanced based on the restructuring of existing NIFA and county debt that will provide more than $400 million in financial relief,” NIFA Chairman Adam Barsky said in a statement on Thursday. “By doing this we were able to avoid a massive property tax increase and cuts to critical services for those most in need. This remains a short-term extraordinary measure to address the unprecedented impact of the global pandemic. There still exists a longer-term structural imbalance that must be tackled sooner rather than later.”
Cohen emphasized the point that, despite the approval of this deal, the county still faces potential financial roadblocks ahead, especially due to the unknown continuance and lingering effects of the coronavirus pandemic.
“No one should be under the impression that the county is in smooth sailing from this point forward,” Cohen said. “In fact, the out-years present formidable fiscal headwinds, and the county should be urged to begin meaningful efforts to address the known mismatch in revenues and expenditures.”
Efforts to reach county officials for further comment on the approval were unavailing.