Nassau County is seeking to bypass the state oversight board managing its finances and borrow funds from New York State, a New York Post columnist wrote.
George J. Marlin, director of the Nassau Interim Finance Authority, wrote:
If the state Legislature goes along, the move will quickly backfire on Nassau — and rapidly prove disastrous for other local New York governments.
NIFA imposed a control period on the county in January 2011 after the state watchdog determined that Nassau’s budget would reportedly run a deficit of approximately $176 million in the 2011 fiscal year. While the county sued to try and block the NIFA takeover, a Nassau judge upheld the decision.
According to Marlin, county officials seemed to be in denial that the county's finances continued to deteriorate throughout the year and are now back seeking to borrow money from the state.
In late May of this year, desperate county officials, end-running the Legislature and the NIFA board, trekked to Albany to beg for the state’s OK to issue $40 million-plus in new long-term debt to fund last year’s property-tax settlements.
If allowed, Marlin said this would "undermine the effectiveness of control boards throughout the state."
The bond market will take notice: Nassau’s credit rating will likely drop, increasing its borrowing costs for the foreseeable future. Indeed, financial institutions could decline to underwrite the county’s debt — making it impossible to do new borrowing.
Should the county be allowed to borrow more funds from New York State while currently operating in a deficit? Tell us in the comments.