"Nassau County - Long Island, New York"

Nassau County ended 2007 with a $23.8 million surplus despite the slowing housing market and less than robust sales tax numbers, Comptroller Howard Weitzman announced today. This was the sixth consecutive surplus for the County since 2002 and represents the fourth year in a row a surplus was achieved without a tax increase under the Suozzi administration.

“The surplus is good news for County taxpayers in the face of a softening economy,” Weitzman said, as he released his office’s annual end-of-the-year report on the County’s finances. “The County showed positive results in 2007 even though the County received $20 million less in sales tax than it initially budgeted and had to spend an extra $37 million over budget on real estate tax refunds,” he added.

According to Weitzman, the recent collapse of the auction rate securities market had no effect on the 2007 year end result, but will impact the 2008 budget, the extent of which can’t be determined at this time.

The County achieved the surplus and overcame the problems with sales tax and real estate refunds, primarily, through the following:

In addition, the County used $12 million to pay real estate tax refunds from the $50 million it borrowed in 2007 for that purpose. The remaining $38 million in borrowed funds could be used in 2008.

The 2007 surplus is net of a $4 million deficit in the Police District, which has been funded out of prior year Police District surpluses.

Weitzman pointed to the real estate tax refunds as a disturbing issue for 2007. The administration budgeted $50 million to pay refunds but closed the year with an expense of $87.1 million. The administration covered $25.1 million of the additional expense out of the operating budget, but used $12 million in borrowed funds to pay the rest. “The increase in certiorari expense and the need to borrow to pay a portion of the refunds is deeply troubling,” Weitzman said.

While the administration has said the increase in refund expense is the result of more aggressive payment of pending claims.

“This is an area that clearly needs more work,” Weitzman said.

Another concern is the increase in the County’s structural gap to approximately $114.8 million in 2007, a sharp jump over the $59 million structural gap in 2006. Weitzman added, “The County’s finances are moving farther away from structural balance, as our recurring expenses outpace our recurring revenues. The County will need to bring its expenses down significantly below current rates of spending or identify new sources of recurring revenue, in order to achieve structural balance. This is difficult to achieve in our mature suburban economy with little economic growth and increasing expenses.”

The $138.6 million in non-recurring revenues used to fund operations in 2007 included $47.5 million from reserves previously set aside to pay debt service, employee pensions and termination pay, $38.1 million in appropriated prior year surpluses, $23.6 million in tobacco proceeds, $17.4 million borrowed to fund projects with the MTA during the Gulotta administration, and $12 million in borrowed funds to pay real estate tax refunds.

“The good news for taxpayers is that the Suozzi administration was able to deliver a surplus in the face of difficult economic conditions,” Comptroller Weitzman said. “However, the economic climate is becoming even more challenging and the administration needs to continue to have its ‘A’ game on.”

WEITZMAN: ‘NASSAU COUNTY CLOSING 2007 WITH $23.8 MILLION SURPLUS, DESPITE DISAPPOINTING SALES TAX RECEIPTS.’