RSS 2.0 FeedFebruary 3, 2011, Bellmore Life
County sues NIFA; Mangano deputy resigns
What NIFA rule could mean for residents
The 10-year-old oversight committee formed during Republican Governor George Pataki’s administration to make sure the county never repeats the financial debacles of the Gulotta administration has taken over the county finances.
The Nassau Interim Finance Authority (NIFA) voted unanimously 6-0 to take over the county’s finances last week for a “control period” after repeated requests for documents from Republican County Executive Ed Mangano – to prove that Mr. Mangano’s 2011 budget was balanced – were not answered, according to NIFA officials.
In response, county officials late Monday sued NIFA and the state to stop the takeover. The county maintains its 2011 budget is balanced, and that members of the NIFA board have political connections to the Democratic Party and are looking to ruin Mr. Mangano’s political career.
The County Legislature’s Presiding Officer Peter J. Schmitt on Monday said he supported County Executive Mangano’s legal challenge to the takeover.
“I wholeheartedly support a challenge to the reasons for the NIFA board’s takeover because the 2011 budget is balanced pursuant to general accounting principles and certified by the county comptroller,” said Mr. Schmitt.
But in a twist, Deputy County Executive Patrick Foye tendered his resignation after the lawsuit was filed, saying in a statement in Newsday and Long Island Business News that “The advice he has received to sue the state – the same state to which the county now looks for legislative and other support – and for others to smear duly appointed members of a state board created to help elected county officials fix Nassau is irresponsible and wrong.”
He added that the suit against the state will be costly, likely fail and add nothing to a long-term solution of the county’s many woes.
County Executive Mangano shot back that “The county executive disagrees with Pat’s opinion on NIFA’s unwarranted actions and has therefore commenced suit to protect homeowners from a property tax increase.”
Code words
“When the NIFA board says it wants to see ‘revenue streams,’ that word is really a code word for taxes,” Brian Nevin of Merrick, an advisor to County Executive Ed Mangano, told Bellmore Life.
Mr. Nevin mentioned several standing NIFA board members who have either worked with Democratic former County Executive Tom Suozzi on his budget, were nominated by Democratic former state Senator Craig Johnson or worked on Democratic Legislator Judy Jacobs’ campaign when she was majority leader, as proof of the board’s politicalization.
Mr. Nevin also raised the legal authority of NIFA to take over county finances when it doesn’t have the full seven-seat board that was originally drawn up by the state 10 years ago. One seat remained vacant as NIFA made its ruling.
A call to state Senate Republican Majority Leader Dean Skelos’s office for information on the legality of NIFA’s move without the full board was not returned.
Mr. Schmitt also said hearings are being scheduled to determine how NIFA arrived at its decision and to investigate the ethical and other interests of the board members.
NIFA’s mission statement states clearly that “A control period will occur upon the authority’s determination that...the county shall have incurred a major operating funds deficit of 1% or more in the aggregate in the results of operations during its fiscal year assuming all revenues and expenditures are reported in accordance with generally accepted accounting principles.”
Rules or no, Legislator Norma Gonsalves (13th Legislative District) told Bellmore Life that “This situation needs a greater deal of exploring.” She commented that Mr. Mangano indeed gave the NIFA board everything it asked for, and posed: “Why are they taking it over now?”
Buying time
Dave Weiss, leader of the Republican Party in Bellmore, told Bellmore Life that a lawsuit may be the only way to give Mr. Mangano the time he needs to sort out the budget. “This is a problem that has been 15 years in the making,” Mr. Weiss said, “and to expect Mr. Mangano to be able to solve it in one year” is not realistic.
He said the first thing that would be asked for in a lawsuit is an injunction to stop the takeover to maintain the “status quo.” The status quo, he said, would enable programs such as the Community Parent Center, the Community Wellness Council and the Long Island Crisis Center to continue to receive funding.
Mr. Weiss added that the only other way to pay for these programs is to raise taxes.
“As an attorney, I can tell you that the foreclosure rate on homes would skyrocket because many people cannot afford the homes they have now.” Adding the specter of new taxes would overwhelm those already underwater (owing more than he the house is worth) with their homes, for example, he concluded.
Chris Brown, president of the Wantagh Chamber of Commerce and owner of Mid-Island Medical Supply, called the NIFA takeover “Scary. Where has NIFA been the last 10 years? This stuff didn’t just pop up overnight,” he said.
He believes that small businesses and residents will now have to make up the deficit, but hopes a balance can be struck between the choices of increased taxes and program reductions.
He said that a lawsuit by county officials would just “throw bad money after bad. The county can’t afford to spend any more money.”
He concluded that politicians on both sides have been ineffective in getting the budget under control, “because they are too concerned with getting re-elected than making the tough choices” for the residents.
NIFA doesn’t raise taxes
Louann Lima, chief of staff for Democratic Legislator Joe Scannell (Fifth LD) – and a member of the minority party when NIFA was first developed by Republican state Senator Dean Skelos and Democratic then-state Assemblyman and current state Comptroller Tom DiNapoli, told Bellmore Life that NIFA does not have authority to raise or repeal taxes.
“NIFA works with the administration to find solutions to the deficits they are facing, but doesn’t suggest raising taxes,” she said. That is at the discretion of the county executive to do if it becomes necessary, she added.
She called the NIFA lawsuit a “politicalization” of the process of governing.
When asked if the Mangano administration would comply with NIFA’s request to balance its budget by February 15, Mr. Nevin replied: “We will follow the law.” He would not comment when asked if state law was vague regarding what powers NIFA actually has.
He also suggested that Moody’s rating service downgrading the county’s financial credibility was a blip only, because Moody’s downgraded several municipalities’ finances during the same time.
He added that both Standard & Poor’s and Fitch rating services kept the county’s outlook as stable.
Conciliatory tones?
Democratic county Legislator Dave Denenberg struck a conciliatory tone over the NIFA takeover: “I felt the budget was bad for our taxpayers when I voted against it in October. I hope collective leadership will right Nassau’s ship and protect our taxpayers.”
Mr. Scannell seemed also conciliatory in an e-mail to Bellmore Life, saying “this bold move by NIFA is not welcome news to any county official. We have worked hard since the state created the oversight board in 2000 to save the county from a previous financial disaster.”
Reinaldo Nunez, president of the North Bellmore Civic Association, told Bellmore Life of the takeover, “It was a terrible thing to have happen. County Executive Mangano hasn’t been given much time to turn things around.”
Democratic State Comptroller DiNapoli said in a prepared statement that “It’s important that interested parties not focus on the takeover itself, but on the steps necessary to restore fiscal stability to Nassau County. Protracted litigation will only delay the inevitable hard choices that must be made to put Nassau back on solid fiscal ground.
“Nassau County has had stagnant sales tax revenue over the past several years, which has made paying for its high cost of services an even more difficult task.”
Meanwhile, the county Democratic Committee pointed out in a news release that just “one year ago, in an 11-8 party-line vote,” Republicans increased their salaries 47% for Presiding Officer Peter Schmitt, from $67,500 to $99,500; and 35% for Deputy Presiding Officer John Ciotti, from $62,500 to $84,500, and “now the state is taking over the county’s budget and finances...”
A call for comment to Republican county Legislator Dennis Dunne (15th LD) was not returned by press time.
