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March 28, 2001 Dems cautiously optimistic on budget numbers
While Nassau County may be $48.3 million in the black after closing the books for 2000, members of the Democratic majority in the Nassau County Legislature urged county officials and residents to forego any celebration since reports of the county's fiscal soundness are extremely premature. An analysis of the budget numbers, prepared by the majority's finance office, clearly indicates that the $48.3 million surplus is the direct result of $25 million in aid provided by the Nassau Interim Finance Authority (NIFA), the state-appointed oversight board charged with monitoring the county's finances, and $42 million in NIFA debt restructuring. Other factors contributing to the surplus balance were several non-recurring one-shots, including $23.6 million from a LIPA settlement; $27 million in unanticipated sales tax; $27 million in investment income; $4.5 million from an OTB Capital Fund; and approximately $20 million that resulted from a lag payroll of county employees. Without these additional revenues, the county would have suffered a deficit of approximately $179 million in 2000 and endured a projected forecast of ongoing fiscal instability. "This surplus should in no way be interpreted as the end of Nassau County's financial problems. We are still at the beginning of a fiscal recovery with a long way to go to becoming financially solvent. While the Democratic majority is willing to take credit for the real deficit reductions implemented this year, it would be unwise to suggest the crisis is behind us," said Presiding Officer Judy Jacobs (D-Woodbury) on behalf of the Democratic caucus. Total sales tax revenue, which totaled approximately $803 million, reflects a strong economy. However, the majority delegation warned that only a modest growth of 2% is expected in 2001, and an economic downtown also may not produce the favorable investment rates the county enjoyed in 2000. Some $100 million in NIFA aid, spread out over a five year period, will provide an ongoing infusion of revenues. However, savings from the deferred payroll program will not continue in the future and the savings realized in 2000 from the lag payroll will not be duplicated in 2001. In addition, the police and detectives contract settlements are still not in place and there is no way to know what the contractual commitments will be if and when these contracts are awarded in arbitration. County legislative leaders made a commitment at the end of 2000 to use the surplus to pay down the county's burdensome and growing debt and to pay off future bills in an effort to minimize the need for tax increases in the future. "There are still many questions as to the viability of the county's budgets over the next four years. We must aggressively pursue government reforms that will eliminate the need for excessive borrowing while tightening controls on outside contracts and labor agreements," said Presiding Officer Jacobs. |