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Tea party FAIL leads to state agency takeover of county's finances
by devtob Wed Jan 26, 2011
Nassau County, NY, just east of NYC on Long Island, is one of the wealthiest counties in the country.
But, after electing a tea party Republican county executive in 2009, it cannot balance its budget, and today a state financial oversight agency (imposed after decades of GOP misrule led to a $100 million bailout in 2000) seized control of the county's finances.
The new tea party county executive, Ed Mangano, had cut taxes, but not much spending, leaving a deficit of at least $50 million in its $2.7 billion budget. So the Nassau Interim Finance Authority (NIFA) now controls the county's books.
Details, below.
The Newsday division of Cablevision presumably has a story about this, behind its stupid paywall, so here's some background and quote from the New York Times story linked above and the Daily News' coverage.
From the Times:
The move, which came after months of steadily more ominous threats and a downgrade of Nassau’s debt by a credit-rating agency in November, turns the oversight board into a control board, with vast power to rewrite the county’s budget and veto labor contracts, borrowings and other important financial commitments.
As a first step, the control board ordered the county government to rewrite its budget by Feb. 15 omitting cost-savings items that the board has called specious or too risky.
snip
"Some places manage their way into fiscal problems, and other places are beset by social forces, many of them outside of their own control," said Steven J. Hancox, a deputy state comptroller who oversees local government. "Nassau has had a history where the populace has enjoyed a variety of services, and those cost money. It doesn’t really matter where you are; when the money dries up you have tough choices to make."
snip
The takeover was a stinging rebuke to Nassau’s county executive, Edward P. Mangano, a Republican who took office a year ago after upsetting a popular incumbent in 2009. Mr. Mangano had repeatedly said the budget was balanced, and then insisted there were ample contingencies to cover any shortfalls. But the authority said that many of his assertions were unfounded or unsupportable.
The "variety of services" includes three 18-hole and one 9-hole golf courses, ocean and bay beach parks, and scores of pools, athletic fields and tennis courts.
Not that there's anything wrong with that -- parks, etc., add a lot to the quality of life anywhere, but such services cost money.
The takeover vote was unanimous, among a board that includes Conservative Party activist and Nassau County resident George Marlin, who had this to say to the Times:
The county’s 2011 budget is built on a foundation of sand.
The Daily News had more Marlin quote:
Nassau County for many years believed it could continue to spend at a rate that far outpaced the growth of revenues. That resulted in major problems a decade ago. Unfortunately the politicians didn't learn; there are expensive union contracts. Ed Mangano has inherited a huge fiscal mess.
Maybe so, but Mangano made the mess messier by pushing through energy and property tax cuts, which are popular, but problematic since tax cuts ALWAYS lead to less tax revenue.
Property taxes in Nassau County are extraordinarily high, top-five in the nation, but so are the level of services -- education, police/fire/EMS, Medicaid, parks, etc.
After Nassau County's fiscal crisis/bailout 11 years ago, Democrats won control of the county for the first time ever and were able to manage its finances.
Now the same cannot be said for the tea party Republicans of Nassau County.
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