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NIFA Director Blasts County's Attempt to Borrow Money

Says if Albany approves this move, it would make a 'mockery of the NIFA control board.'

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.

GCBob June 12, 2012 at 11:59 AM
The county really has no choice but to cut services and or raise taxes. NIFA is not going away and to borrow more money at higher interest rates just places the county deeper into debt. Start cuts at the top, political appointed positions, and work with NIFA on a plan to get us out of this mess. Also do away with the residential property tax in favor of an income tax. Property tax refunds are nothing more than a yearly financial drain whose time has passed.

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