June 30, 2010

Maragos: Nassau County closes difficult 2009 financial year

Nassau County Comptroller George Maragos today released the audited Comprehensive Annual Financial Report (CAFR) for the 2009 fiscal year. Nassau County ended the year with a small budgetary surplus of $1.2 million which was only achieved by the prior administration’s massive borrowing, deferral of expenses and “one shot” non recurring revenue items. Without these very troubling budget maneuvers by the prior administration the County would have had a $250.3 million structural deficit.

2009 continued a disturbing trend that saw the county’s structural deficit increase each of the last 5 years to a cumulative total of $720 million.  Unfortunately, the current 2010 budget, which was also adopted by the prior administration, continues this trend.

Maragos also noted that although the Nassau Interim Finance Authority (“NIFA”) criticized the prior administration’s reliance on borrowing it recently appointed Tom Stokes to its Board.  Stokes was the prior administration’s deputy county executive for finance. 

"It’s disconcerting that NIFA would appoint to its Board someone from the prior administration who was not only directly involved but was instrumental in implementing the same budgetary tactics NIFA criticized and which placed the county in the dire financial shape it is in now.  NIFA’s action calls into question its future credibility and independence,” said Maragos.

Comptroller Maragos added “In order to reduce the County’s structural gap in the future and restore sound fiscal policies, the current administration will have to reduce recurring expenses, identify new sources of recurring revenues and avoid borrowing for current expenses. I also recognize that the current administration will need to continue some of the same budgetary practices of the prior administration during a transition period as it works towards restoring fiscal responsibility and a balanced budget.”

The County’s long-term debt for 2009 totaled $3.5 billion of which $1.2 billion relates to property tax refunds. The County’s estimated future liability to fund health-care benefits for retired employees is estimated to be $3.6 billion.

The County’s financial results were audited by Deloitte & Touche LLP, an independent certified public accounting firm. The CAFR reports on the finances of various funds and components of the County, including NIFA, the Nassau County Tobacco Settlement Corporation, the Nassau County Sewer and Storm Water Finance Authority, the Nassau Community College, the Nassau Health Care Corporation, the Nassau Regional Off-Track Betting Corporation and the Nassau County Industrial Development Agency.

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