Confirmed: NIFA did a Tom Gulotta

Critics of a $1.1 billion refinancing of Nassau's debt by the county's financial control board were right.

Advocates of the massive deal were wrong.

As watchdogs warned three years ago, the refinancing done by the Nassau Interim Finance Authority in early 2021 is costing Nassau about $30 million more a year for the next 15 years.

And, it turned out, the refinancing wasn't even needed.

Nassau Budget Director Andy Persich confirmed the additional costs when questioned by Legis. John Ferretti, a Levittown Republican, at a legislative meeting last month.

John Ferretti

"Refinancing helps you in the short term but  in the grand scheme we will pay more money than if we did not refinance," Ferretti said.

"That’s coming due now, right?"

"That's right," Persich responded.

In late 2020 the county's financial control board -- The Democrat-controlled Nassau Interim Finance Authority -- and the administration of then-County Executive Laura Curran, a Democrat, direly predicted a $385 million budget deficit that year resulting from the  government-ordered economic shutdown during the coronavirus pandemic.

NIFA insisted the refinancing would provide Nassau with cash to cover its projected budget deficits  -- and would coincidentally fill its coffers just as Curran was running for re-election.

But Nassau ended 2020 with a $90 million surplus -- without the refinancing. It has ended each year with budget surpluses ever since, undoubtedly helped by federal Covid aid.

Ironically, this type of financing in the 1990s by then-Republican County Executive Tom Gulotta -- borrowing to cover millions of dollars in current expenses only to pay much more over the long run -- led to Nassau's near bankruptcy in 1999. The state legislature created NIFA in 2000 specifically to rein in such profligate practices.

After Persich confirmed the additional costs at the legislative meeting, Presiding Officer Howard Kopel, a Lawrence Republican and veteran lawmaker elected presiding officer in January, recalled, "I was personally in the room when the borrowing was discussed. It was not strictly bipartisan. This was shoved down our throats by NIFA....which deliberately misinterpreted the sales tax receipts at the time. They estimated a number that  was mathematically impossible."

Howard Kopel

"It's going to cost the county millions of dollars over time," he said.

Ferretti added, "They indicated they would not approve the budget...unless we did the refinancing. We were faced literally with shutting the county down if we didn't go along.  That’s why we did it."

"There were benefits. But there were also detriments.. We are about to foot the bill for that."

Democratic legislators, who strongly agreed with NIFA's dire deficit forecasts three years ago, made no comments about the additional costs of refinancing.