Curran budget team wrong again

Nassau County Executive Laura Curran

                                                                 

Nassau County Executive Laura Curran's crack budget team was way off again in its financial predictions, according to the county's independent Office of Legislative Budget Review.

As late as Dec. 21, Curran's budget office was still predicting the county would end 2020 with a $385 million budget deficit because of the coronavirus pandemic -- $261.7 million of that fiscal hole would come from a 20 percent drop in sales tax revenues.

The dire predictions led the county's financial control board, the Nassau Interim Finance Authority, to refinance $1.1 billion of county debt (Yes! $1.1 billion!! The largest refinancing in the county's history) to get some cash up front to fill Curran's budget holes this year when she is running for re-election in November.

NIFA chairman Adam Barsky told Bloomberg.com that the bonds sold Feb. 4 will give Curran a cash cushion of  $285 million this year and $150 million in 2022. He didn't mention that financial watchdogs predict the refinancing will ultimately cost the county millions more over the additional 15 year term of the new bonds.

But the budget office was wrong. The county got its final sales tax numbers for 2020 last week. Collections were down, but not as low as predicted.

Instead of being down 20 percent over last year, sales tax collections in 2020 were down 5 percent. Total collections were down $88 million from the 2020 budgeted amount of about $1,270 million, Budget Review wrote in a memo yesterday to the county legislature.

That means the county budget office --ten days before the end of the year --was off by about $174 million in its predictions of a sales tax deficit.

Which isn't a surprise, for the Curran's budget team. They were off by about $76 million last year.

In 2019, her budget team predicted on Dec. 21, which is the date they post the county's November financial report, that the county would end 2019 ten days later with a small $215,823 surplus.

Instead, the county ended with more than a $76 million surplus,

Budget review said the county ended 2020 with almost $1,182  million in sales taxes, compared to $1,244 million in 2019 and $1,270 million budgeted for 2020.

The amount collected in sales taxes for 2020 is actually about $160 million more than Curran's budget team has predicted for all of this year.  Again, no surprise , given the team's track record.

"Professional economic forecasters anticipate positive economic growth, both locally and nationally," Budget Review wrote in the memo. "..The average annual economic growth in 20201 is expected to be roughly 4.5 percent."