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N.Y. County Coping With Budget Cuts

May 15, 2000

WESTBURY, N.Y. (AP) _ By the time Gov. George Pataki came riding in last week with a $100 million financial bailout plan for Nassau County, residents in this New York City bedroom community _ one of the richest in the nation _ were already coping with the effects of budget cuts.

``What this has done to our community is a disaster,″ said Rudy Vanterpool, administrator of the New Cassel/Westbury Youth Services Project, one of nearly 100 social service agencies that suffered $8 million in cuts. ``I can’t even put into words what has happened to us, it’s so horrifying.″

The smorgasbord of services provided to Nassau’s citizens for years was part of what brought the county to near bankruptcy. Nassau’s Republican leadership kept adding government programs _ and kept voters happy by not raising taxes.

Now it’s time to pay the piper.

``The whole business community has been very concerned about the situation,″ said Matt Crosson, president of the Long Island Association, the island’s largest business group. ``It casts a shadow over the economy of not only Nassau County, but Long Island in general.″

How exactly did one of the nation’s wealthiest counties get into such a financial mess? Why are lawmakers scrambling to close a $117 million shortfall this year alone?

Fred Parolla, the county comptroller, blames the mess in part on County Executive Thomas Gulotta, who ``didn’t raise the general property tax for eight of 10 years,″ Parolla said.

In addition, Parolla said, contracts with the public employee unions, especially the police unions, have grown ``beyond what the county can afford.″

Police spending makes up nearly a quarter of the county’s $2.2 billion budget and has risen 64 percent since 1989, twice as fast as county spending overall.

Federal statistics show that Nassau employs 230 officers per 100,000 residents, 77 percent higher than the average for suburban county departments nationwide.

Gulotta, who is proud of his record of keeping taxes steady, has said that Nassau consistently fights against police spending increases, but usually loses in binding arbitration. He recently threatened to lay off more than 200 officers unless the police union agrees to a package of contract givebacks.

He also claims that despite the fiscal problems, Nassau County is still rated among the best places in the country to live; something he sees as a positive reflection of his tenure.

Other critics say the mess can be traced to the fact that the county relied too much on borrowing. Wall Street executive Frank Zarb, who was appointed by Pataki in March to review Nassau’s financial health, said last week that the county’s $2.7 billion long-term debt was ``extremely high.″

He noted that the per capita debt in Nassau was $2,210, while the average amount for residents in neighboring counties, including New York City, was $311.

Because of the county’s precarious financial condition, Standard & Poor’s has given Nassau a credit rating that is one notch above junk status, making it much more expensive to borrow. It has threatened another downgrade unless the county begins to straighten itself out by June 30.

Part of the solution offered last week by Pataki and Zarb, who is chairman of the National Association of Securities Dealers, is to create a separate bonding agency to refinance some of the county’s long-term debt at lower interest.

Nassau also is sinking under the burden of an archaic property tax assessment system unchanged since 1938 _ before the postwar building boom transformed the rural county into quintessential suburbia.

Over the years, property owners challenged their assessments so successfully that the county has run up an $800 million debt to pay refunds. Also, it takes an average of six years to settle a tax grievance case because the county doesn’t have enough staff to handle cases.

The county legislature voted in March to overhaul the assessment system by 2003, spurred by the threat of a lawsuit claiming the system is discriminatory. The complaint was that homes increased in value much faster in white neighborhoods than in minority areas, leaving minority homeowners paying a higher percentage of home value in taxes.

The county’s financial troubles have yet to have an impact on home sales, according Tricia Chirco of the Long Island Board of Realtors. She said April sales figures put the median price for a Nassau County home at $254,000, up from $220,000 a year ago.

``People are still feeling comfortable about selling and buying,″ she said.

Pataki’s rescue plan signaled state Republicans would fight hard to regain control of a county that could be pivotal in the U.S. Senate and presidential races this fall.

The governor’s ``carrot-and-stick″ bailout offer requires the county to cut $50 million from this year’s budget, as well as $70 million in each of the next three years. Pataki has offered $100 million in aid over five years, contingent on the reductions.

But Joe Smith, director of Long Beach Reach, a social service program, said the deep cuts in funding for youth programs mean ``we’re basically throwing away a generation.″

``We can’t afford to do that as a society,″ he said. ``It’s every bit as important as the police and the other things we take for granted.″

___

On the Net:

Long Island Association site: http://www.longislandassociation.org

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