County Executive Laura Curran recently announced the publication of the county’s Multi-Year Financial Plan Update. The report identifies that Nassau County faces a $749 million deficit over the next 18 months—$385 million in FY2020 and $364 million in FY2021, due to the economic devastation brought on by COVID-19.
While Nassau County continues to fund first responders and health department employees on the frontlines of battling this ongoing public health crisis, the county has prepared gap closing programs to address shortfalls created by declining sales tax revenues, which account for 40 percent of the county’s total revenues.
Gap closing programs rely on NIFA to refinance $75 million of existing NIFA and county debt in FY2020 and an additional $210 million in FY2021, for a total of $285 million over the two fiscal years.
Recognizing the COVID-19 pandemic’s impact on falling county revenues, Curran asked the New York State Legislature earlier this year to increase NIFA’s bonding authority. The legislation was approved in April. Without NIFA’s assistance, the county would need alternative gap closing measures including less advantageous, short-term borrowing options.
Curran has called on Washington to pass the federal HEROES Act, a critical resource that provides revenue recovery to state and local governments and could be used to help close Nassau County’s multi-year gap. Passage of some version of the HEROES Act is tenuous as best, and no aid is forthcoming from the federal government to date.
“Our residents and businesses are facing difficult times and the county’s services that support the health and safety of residents are in high demand,” Curran said. “Whatever the crisis may be, my administration will always meet the challenge of protecting our residents, but we will need a balanced budget to do so. We look to work collaboratively with the County Legislature to pursue our strategy for maintaining the funding needed for essential services as the effects of this public health crisis continue.”
Curran has discussed her plan with the leaders of the Majority and Minority Caucus and plans to hold in depth briefings with legislators in both conferences to ensure the county can work together through this fiscal crisis. Nassau County’s business community and consumer confidence are going to need time to recover and will require working together.
In addition to NIFA refinancing, there are two key factors supporting the plan: using $112 million in budget surplus that the administration achieved last year through sound fiscal discipline and reducing the size of government, and $103 [million] in CARES funding for pandemic expenses.
“Our sales tax collections in FY2020 are projected to decline by 20 percent because of the COVID-19 pandemic,” said Nassau Deputy County Executive of Finance Raymond Orlando. “Nassau County has developed a gap closing plan to address these unprecedented deficits.”
Gap Closing Plan for FY2020—$384 million deficit
• 2019 surplus—$112 million
• CARES Act—$103 million Expense Actions
• NIFA Debt Service Restructuring Savings—$75 million
• Program to Eliminate Gap—$25 million
• Litigation and Workers Compensation Fund—$38 million
• Leftover capital funds from completed projects—$32 million
Gap Closing Plan for FY2021—$364 million deficit
• There are no forecast surplus
funds for FY2020 available
• There are no additional CARES Act funds available
• NIFA Debt Service Restructuring
• Savings from vacancies—$70 million
• Efficiency program—$50 million
• Program to Eliminate Gap—$25 million
• Other Expense Reductions—$9 million
Curran will be submitting her executive budget for FY2021 on time, no later than Sept. 15. At that time, the she will lay out a detailed plan for a budget balance in FY2021, including any updates.
—Submitted by the office of Laura Curran