Says Authority Constantly Predicted Budget Shortfalls
By Hank Russell
The Nassau County Comptroller slammed the Nassau Interim Finance Authority (NIFA) for its “overly pessimistic and misleading” analysis in its recent report on the county’s updated Multi-Year Financial Plan.
On August 7, NIFA released its report that reviews the county’s finances. The Authority said the county’s fiscal outlook in the Major Funds — that is, the General Fund, the Police District Fund, the Police Headquarters Fund, the Fire Commission Funds and the Debt Service Fund — “remains concerning in the Out-Years (Fiscal Years 2025-2028).” Additionally, Nassau’s short-term fiscal outlook was “propped up by a one-shot infusion of resources from reserves held outside of the Major Funds,” according to NIFA.
The Authority predicted a GAAP deficit of $204.7 million in FY 2025 ($96.5 million after the county’s planned use of $108.2 million of its reserves to pay for operating expenses) and a $273.9 million hole in FY 2028, or $231.9 million after using $42.0 million in reserves for operating costs
NIFA cited many factors for the “weak fiscal outlook,” among them “overestimated sales tax projections and fees, underestimated social services costs, the continued planned use of reserves to pay operating costs (which are constrained in their permitted uses) and the failure of the County to account for the expected rise in its labor costs.”
The Authority expressed concern about the use of reserves. “Although the purpose of reserves should be to smooth the impact of unanticipated revenue shortfalls and expenditure overruns, their now-routine use demonstrates the absence of lasting improvement in the County’s fiscal strength and risk management,” the authority said.
Elaine Phillips, the county comptroller, reviewed the report and argued that Nassau’s finances “have improved markedly since 2022,” adding, “We have seen real, sustained fiscal strength and prudent stewardship.”
She pointed out that Nassau’s bond ratings from Moody’s Investor Services and Fitch Ratings increased in May 2024 from “positive” to stable.” In May 2025, Standard & Poor’s upgraded the county’s bond rating from “positive” to “stable.” Sahe said the rating agencies “[cited] the county’s healthy reserves and a string of budget surpluses.” According to Phillips, Nassau had a $750 million surplus and cut its legal and tax refund liabilities by more than $700 million since 2021.
“These bond rating upgrades are objective evaluations by financial professionals, not by political appointees,” Philipps said. “In contrast, NIFA’s board members are appointed by the Governor, creating a partisan structure, which raises legitimate questions about the political motivation behind their critiques.”
Phillips noted that NIFA had forecasted deficits from 2020 to 2024 — with inaccurate results:
- In 2020, NIFA predicted a $47.8 million deficit. The county had a $90.6 million surplus.
- NIFA’s prediction was a $346.2 million shortfall in 2021. Nassau showed a surplus of $27.2 million.
- NIFA foresaw $39.3 million in the hole in 2022 and 2023. Nassau showed surpluses of $79.7 million and $19.3 million during those two years.
- In 2024, NIFA projceted a deficit of $68.7 million. Nassau showed a $46.8 million surplus.
She added that, by the end of 2024, Nassau’s total GAAP fund balance for all government funds increased by $294.1 million to $1.9 billion.
“Time and again, NIFA has issued projections that were later proven to be wrong — often by wide margins,” Phillips said. “NIFA’s report, while purporting to be an independent analysis, is marked by selective focus, inconsistent standards, and repeated misstatements.”