Long Island's Nassau County is one of the nation's wealthiest counties, yet its inability to balance its budget (though the county executive claims it's in surplus) is a warning to other counties to get their finances in order before repealing taxes.
Nassau's major problem was illustrated by borrowing funds to pay for operating expenses and tax refunds for residents and businesses who claimed refunds on their property tax assessments. The take-over also shows that wealthy counties are at-risk as heretofore only poorer cities and counties had seen their finances taken over by the New York State.
"A state oversight board on (Jan.26) seized control of Nassau County's finances, saying the county, one of the nation's wealthiest and most heavily taxed, had nonetheless failed to balance its $2.7 billion budget. While voting 6 to 0 to take over the county's finances, the control board, the Nassau Interim Finance Authority, stopped short, for now, of declaring a financial emergency, which would also allow it to impose a wage freeze on county workers.
"In a lengthy text explaining its decision, the authority said that (County Executive) Mangano's signature tax cut - the repeal of a tax on home-heating fuel - was one of several factors that stretched the county's ability to balance its budget to the "breaking point."
The NIFA will release control of the finances back to the county when the budget is balanced.
From WSJ, 1/19: Nassau Attempts to Thwart Takeover: "How did such a wealthy and heavily taxed county end up in such a budget squeeze? Part of the answer, experts say, is that government officials have been unwilling to make politically unpopular service cuts and tax increases during tough economic times."
FULL STORY: New York State Seizes Finances of Nassau County

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