Announces Major Budget Cuts, Layoffs & Wage Freeze
March 17, 2011 – (RealEstateRama) — Due to the change in accounting rules applied by the Nassau Interim Finance Authority (NIFA), Nassau County Executive Edward P. Mangano today announced major budget cuts for 2011 that protect homeowners and employers from a 21.5% property tax increase. The County Executive detailed over $121.2 million in budget cuts that include $60.5 million in employee-related spending reductions, $40 million in across the board budget cuts and $20 million in lower tax refund liability than projected by NIFA.
“Since the last thing Nassau families need in these tough economic times is a double-digit property tax increase, I will submit a revised financial plan next week that cuts County spending by over $121 million,” said County Executive Mangano. “These cuts will affect every area of the County and the services we provide. That’s unfortunate, yet necessary in the face of NIFA’s decision to change accounting practices and create a paper deficit.”
The $121.2 million in budget cuts announced by the County Executive include:
- $60.5 million in employee-related spending reductions, including: $50.5 million in savings from layoffs and the elimination of vacant positions; and $10 million in savings by calling on NIFA to freeze employee wages.
- $40 million in across the board budget cuts, including: $15 million from the reduction of contractual expenses; $15 million from the restructuring of the police department; $5 million from ending the County’s relationship with the MTA to run Long Island Bus service; and $4.5 million from the privatization of inmate healthcare.
- $20 million in lower tax refund liability than projected by NIFA.
“By reducing spending and Nassau’s workforce, I am taking the appropriate steps required to protect our homeowners from a property tax increase,” said County Executive Mangano. “I ask NIFA to understand the tough economic climate we are in and the financial difficulties faced by our families. That is why I call on NIFA to use their power to stop automatic pay increases – negotiated by my predecessor – that are scheduled to take place on April 1st.”
Earlier this week, the Supreme Court found that NIFA applied a different set of accounting rules than was applied in the past. In fact, the Judge questioned whether there would even be a control period if NIFA applied the same rules as it did in the past. This accounting change derailed County Executive Mangano’s assessment reforms that provided a path to end borrowing entirely in 2013. Although Nassau County borrowed funds to pay property tax refunds each of the past 20 years, the Court provided NIFA the discretion to suddenly end this practice in some of the most challenging economic times for our families. The hundreds of millions of dollars generated by the County’s wasteful assessment system will now fall entirely on our residents shoulders annually.
“NIFA has not provided any fiscal alternative to end this practice and prevent a property tax increase,” said County Executive Mangano. “While I remain curious in learning how NIFA believes changing accounting rules to create a paper deficit helps our taxpayers, I am particularly concerned with its impact on reforms I put in place to repair Nassau County.”
County Executive Mangano’s assessment system reform plan, passed by the Legislature in 2010, recognized the estimated $365 million in outstanding debt left behind by the prior administration. Although NIFA sat idle as the County borrowed over a billion dollars to pay tax refunds, they now want to completely end this practice and change the accounting rules. This has contributed to the largest part of NIFA’s paper deficit.
“Working together, NIFA and I must fix our County’s finances without raising property taxes. While the change in accounting rules makes it a lot more painful, I am confident Nassau will meet its challenges,” said County Executive Mangano. “We have the opportunity to truly fix Nassau County’s finances now and forever. Although I did not create this budget mess, I intend to fix it so that Nassau County can once again be an affordable place to live, work and raise a family.”
