Nassau County Interim Finance Authority chair and director Richard Kessel. Photo from Schneps Media Archies.
Nassau County’s 2025 budget failed to receive approval from the county’s financial oversight group for the first time in six years after the Nassau County Interim Financial Authority, approved a resolution calling on the county Legislature to amend the county’s multiyear financial plan for 2025-2028.
The resolution said the county used prior year surpluses to fund future expenses, which is a violation of legally mandated generally accepted accounting principles which the county must follow by law.
The budget proposes using $30 million of fund balance every year from 2025 to 2028 to bridge the gap between its projected revenues and expenditures that would otherwise result in a deficit, but this is not allowed under GAAP, the resolution said.
Blakeman’s $4.2 billion 2025 budget passed the GOP-led legislature on Oct. 30 along party lines 12-6, with Republicans supporting and Democrats opposing.
A second issue raised in the board’s resolution was the disavowal of any responsibility by the Nassau Health Care Corporation, the parent company of Nassau University Medical Center, for funding the county’s non-federal share of program payments.
NUMC, Nassau County’s only publicly funded hospital, primarily serves Medicare and Medicaid patients and has a Level 1 Trauma Center and certified Burn Center. As a publicly funded hospital, NUMC’s operations are largely financed by taxpayer dollars.
The future of the hospital is threatened by the center’s decades-long financial problems and the inability of its management, the state, and Nassau County to agree on who will run and where the money is coming from to cover its expenses.
At a press conference at NUMC, Chairman Matthew Bruderman announced the filing of a notice of claims against the State of New York, alleging the hospital was defrauded of millions of dollars.
The claim was filed with the office of the New York State Attorney General on Nov. 19.
NIFA’s resolution said that in a letter on Nov. 21 to NIFA, counsel for NHCC rejected any obligation to fund the local share of the Medicaid Disproportionate Share Hospital program and Medicaid Upper Payment Limit program payments.
The federal government currently funds 50% of the UPL amount. The remaining balance is to be covered by “Nassau County and/or NHCC” the resolution said.
NHCC’s disapproval of responsibility for funding the county’s non-federal share creates “significant risks” that the legislature has not properly addressed in its most recent budget according to the resolution.
The resolution also stated that the non-federal share of DSH and UPL program payments allocable to NHCC can be expected to amount to tens of millions of dollars per year.
Prior to the budget passage, a 28-page report from NIFA identified what the board argued were multiple structural shortcomings in the budget that may “threaten the county’s long-term financial stability,” according to the Oct. 22 report
The NIFA report, according to members of the Republican majority, is not an accurate assessment of Nassau County’s fiscal state.
“Nassau County is the most fiscally sound large county in the United States and this is further evidence of the [Gov. Kathy] Hochul puppet’s mischief.” said Chris Boyle, a spokesperson for Blakeman.
The NIFA board, which was created by then Gov. George Pataki in 2000 after providing Nassau with a financial bail out, is appointed by the governor.
NIFA said Nassau would have ended the 2024 fiscal year in a deficit if not for the one-shot infusion of money from the American Rescue Plan Act, or ARPA, that President Joe Biden passed in March 2021 to help local and state governments stay afloat during the pandemic.
The administration used those funds to “mask” the county’s structural financial imbalance in 2024, the NIFA report said. Those imbalances continue in the proposed 2025 budget and through 2028, but are more obvious without the ARPA money to hide behind.
Multiple county spending habits have been called into question over the past year.
The Legislature approved along party lines, with Republicans for and Democrats against, $10 million of COVID relief money to be spent on Nassau’s 125th anniversary celebrations. Blakeman justified the expenditure, saying it would increase tourism to the county.
Ultimately, the NIFA report said, the county can manage some of these risks by dipping into its reserves, but some problems are so glaring that they “raise doubt whether the county can navigate the long-term headwinds if the economy significantly declines.”
“It’s disappointing that the county executive and county legislators aren’t taking their budget responsibilities seriously and are presenting NIFA and the public with a budget that is patently legal and doesn’t add up” Rory Lancman, vice chairman and director of NIFA, said in a statement to Schneps Media LI.
“I encourage them to do their job and pass a budget that we can approve” he added.
NIFA’s resolution requires the Legislature and Nassau County Executive Bruce Blakeman to revise the budget by Dec. 10 or risk NIFA crafting its own budget at the oversight board’s next meeting on Dec. 19.