Nassau County’s Coming Fiscal Crash

In Columns by Hal PetersonLeave a Comment

Last fall, E.J. McMahon, a fiscal policy contributor at the Manhattan Institute for Public Policy wrote, “budget deficits papered over with borrowed money, unaffordable union contracts, pension contributions amortized into the future, retiree health benefits promised but unfunded, corruption, accountability blurred, responsibility shirked, and hard decisions avoided again and again……exists in the affluent corners of New York’s archetypal suburb, Long Island.”

A whole range of factors are involved, his full report presents a sustainable argument that the county could be on the cusp of a meltdown short of serious reform.

Adding substance, County Comptroller Jack Schnirman’s recently issued a detailed financial review. We ended last year (a) with a $122.4 million deficit compared to a $63.9 million surplus in 2016 caused by tax certioraris payments, judgements and settlements and (b) the county’s “rainy day fund” decreased from a surplus of $46.8 million to a negative $68.8 million showing that our assets and deferred outflows of resources are insufficient to fund all purposes to which a government is bound to honor.”

Digging a little deeper, all eleven (11) operating funds are in the red, police termination payments were $30 million higher than budgeted, revenues from OTB and video lottery terminals are down, and the cost of health insurance and pension contributions increased by $1.2 billion to $6.4 billion at the end of last year.

In summary, both McMahon’ assessment and the comptroller’s report portray concerns  that in many ways resemble what we witnessed before the collapse of Detroit. I am hard pressed to list solutions given the history of Nassau County in managing other people’s money. Even wealthy suburbs can’t spend beyond their means forever.

To lighten the moment, some lyrics from the Broadway show “Music Man” comes to mind.

“Friend, either you’re closing your eyes to a situation you do not wish to acknowledge, or you are not aware of the caliber of the disaster indicated, by the presence of a pool table in your community. Well, ya got trouble, my friend, right here, I say, trouble right here in River City.”

 

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