Legislative Republicans Stifle Public Commentary at Hearing Where George Maragos Continued to Duck Tough Questions
(Long Island, NY) Today, Former Nassau County Comptroller Howard Weitzman was denied the opportunity to offer public testimony at a budget hearing before the County Legislature. Weitzman is demanding an apology from Committee Chairman Howard Kopel for denying him the opportunity to speak despite the hearing notice explicitly stating there would be a period for public comment.
“George Maragos and his Republican friends in the Legislature can run, but they cannot hide from the truth,” said Weitzman. “Denying public comment cannot deny the truth that George Maragos is misleading taxpayers by using creative accounting to hide the county’s deficit and record-high debt.”
Weitzman, the only CPA to be elected as County Comptroller, hoped to offer testimony rooted in his eight years of experience as Comptroller and as a life-long financial professional. What follows is a copy of Mr. Weitzman’s prepared remarks that he was denied the opportunity to present before the Legislature.
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Comments by Howard Weitzman on Comptroller’s Mid-Year report for 2013
September 3, 2013
My name is Howard Weitzman. I served as Nassau County Comptroller from 2002-2009 and am a candidate to return to that position. I also am a CPA with 35 years of private sector experience including serving as a partner in a national accounting firm.
This year’s mid-year report, as every other financial report issued by Comptroller Maragos, is not a Financial Report, but a political statement. Mr. Maragos has consistently issued reports which manipulate County results to promote his political agenda. While the Comptroller has again tried to paint a picture of a healthy County, the 3 consecutive downgrades by outside rating agencies, and the failure of the County to remove State financial controls tell a very different story.
The mid-year reports issued by the Comptroller, the Office of Legislative Budget Review (OLBR), and the Office of Management and Budget (OMB) all project small surpluses, but the Comptrollers report is far and away the most optimistic. Both OLBR and OMB relied on significantly higher borrowings than the Comptroller to achieve their surpluses. Why such a difference in results?
The Comptrollers report provided for the payment of $88 million in real estate refunds in 2013. But these refunds relate to 2012. They were rolled into 2013 based on an interpretation of an order issued by Judge Adams on the last day of 2012 with which I disagree. But whatever your opinion of the accounting, the undeniable fact is they related to 2012. So what happened to the 2013 expense? The answer is there is none shown. The projected $80 mil. in new refunds for 2013 was omitted entirely from the projections. So, once again the comptroller has omitted tax refunds to achieve a positive result.
Mr. Maragos’s statement that the “the liability for tax refunds has been addressed and is expected to decline” is unbelievable. While the County’s recorded liability for tax refunds is universally believed to be understated, it is still twice the level it was at when he took office. Residential refunds are declining because the county is barely defending new residential challenges. While this practice may reduce residential refunds, it has created tax increases of up to 29% for those not challenging their taxes. This practice will force more and more taxpayers to challenge their assessments just to stay even. There has been no noticeable change in commercial refunds which make up the bulk of the tax liability.
The Comptroller has consistently used the improvement in the structural gap since 2009 as an indication of improved operations. The structural gap is a useful metric, but it is not subject to outside verification. As a result, Mr. Maragos has manipulated numbers again to make it appear as if County operations are improving. Again the truth is quite different. The Comptroller omitted real estate tax refunds for 2013 entirely from the gap calculation. Whether these refunds are paid through borrowings or through operations, they will increase the gap by $80 mil. It appears that the Comptroller omitted amortization of pension borrowings of $39 mil. as well. Had these omissions been included, they would have shown the structural gap increasing by 47% over 2012.
Mr. Maragos also uses 2009 as the baseline to measure the results of the Suozzi administration. The problem with that is 2009 was the depth of the recession and far from a typical year. 2009 included massive federal aid received by every municipality in the country to offset the impact of the recession and borrowings by the County for termination pay and retirement incentives to reduce the payroll mid-year to offset the loss of $100 mil. in sales tax. Hardly a typical year. In fact, if you include the omissions previously discussed, the structural gaps in every year from 2010 through 2013 are equal to or greater than those experienced from 2002-2008. Quite a different story from that told by Comptroller Maragos.
Finally, the Comptroller casually mentions in his report that the risk of an adverse decision on the wage freeze requested by the administration “has been reduced due to the improving economy and fund balance.” Nothing could be further from the truth. All of the operating efficiencies claimed by the administration can be traced directly to the wage freeze. Without it, the county would be incurring even greater deficits. Without the wage freeze, the County’s annual expenses would increase by almost $100 mil. per year. The County reserves are reported to be only $80 mil. There is no possibility for the county to meet this responsibility if so ordered by the court without massive tax increases or service cuts. This is reality, not wishful thinking.
There is no question that the County is skating on thin financial ice. For the Comptroller to make up feel good financial reports destroys the County’s credibility and does nothing to begin the process of restoring Nassau to financial health.
About Howard Weitzman, CPA
In 2001, Howard Weitzman became the only CPA ever elected to the office of Nassau County Comptroller after a 30 year career as a healthcare financial executive. He was subsequently re-elected to a second term in 2005. During his eight years as Comptroller, Howard Weitzman played a central role in the financial rescue of Nassau County. Under Howard’s leadership, the office of Comptroller became a national model for transparency and accountability while at the same time developing a reputation for groundbreaking audits, independence and integrity. A graduate of Brooklyn Technical High School and Queens College, Howard is the former Mayor of Great Neck Estates, where he and his wife resided for 35 years and raised three children. He is currently a resident of North Hills.
