Nassau County is one step closer to having a state board take control of its long-troubled finances.
Yet instead of proposing realistic solutions to fix things — i.e., cutting spending — County Executive Ed Mangano is threatening to sue the board if it follows through on its threat.
Bad move.
The Nassau County Interim Finance Authority (NIFA) has called a special meeting for a week from today at which it is expected to impose a formal control period over the county’s finances — which it can legally do if the budget is out of balance by 1 percent or more.
Or even if it reasonably appears to be going out of balance.
Mangano’s chief finance officer, Tim Sullivan, insists “there is no deficit.”
But NIFA begs to differ.
It says Nassau’s budget for the next fiscal year, which starts Jan. 1, fails to “meet the standards of prudence necessary for us to project budget balance at this time.”
Moody’s, the credit-rating agency, cites $158 million in risks and recently lowered the county’s credit rating.
And, as this page has noted, the “savings” Mangano cites include such gimmicks as a $15 million hiring freeze that followed an $86 million early-retirement buyout — that was funded by $86 million in new county bonds. And $60 million in phantom union concessions.
The Manhattan Institute’s E.J. McMahon has pegged the problem simply: “The county raised spending to unsustainable levels during the boom years,” he wrote on these pages, and then used federal stimulus money to spend even more.
NIFA can impose a wage freeze, cut staff and reopen contracts with county employees. Indeed, the board can approve or reject the county’s budget and all other major financial commitments.
And that includes any more short-term borrowing to cover expenses.
Mangano’s answer: Cross his fingers and hope for an increase in the county sales tax. And, again, to threaten a suit.
A decade ago, Nassau averted insolvency with a $100 million bailout from Albany. This time, the cupboard’s bare.
NIFA is serious.
Mangano needs to be, too.