Nassau County, N.Y., officials are working to break a deadlock that could prevent the county from carrying out a plan to cover its accumulated budget gap with a general obligation bond issue.
Members of Nassau's six-member Board of Supervisors will meet with County Executive Thomas S. Gulotta today to iron out their political differences. So far, those differences have prevented county officials from implementing a plan to close a projected accumulated deficit of $130 million for fiscal year 1992, which ends Dec. 31, and fiscal year 1993, said David A. Vieser, a spokesman for the county executive.
Currently, the Board of Supervisors, which is the county's legislative body, cannot agree on a deficit financing plan. Any plan would need a majority vote ofd the board, which is equally divided along party lines.
If not resolved, the impasse could strike a blow to the county's credit rating. In January, Moody's Investors Service downgraded Nassau's general obligation bond rating from A1 to A.
Standard & Poor's Corp. and Fitch Investors Service do not rate Nassau County GOs. Since the beginning of the year, the county has floated several proposalsl to close the projected gap in its $2 billion 1992 budget.
A long delay could prevent the county from seeking state legislative approval to complete a deficit bond issue. The state Legislature adjourns at the end of this month, which means county finance officials have little time to send a plan to Albany for lawmakers' review.
Michael L. Johnston, a vice president at Moody's, said it will be in the county's best interest to come up quickly with a formula. "Timing is very important," Mr. Johnston said. "The longer it takes them to put off a plan, the more difficult the situation becomes. For example, any plan that begins in the last quarter of the year will have less effect."
Mr. Johnston said any future rating agency action will be based on the quality of the county's budget plan, which must move Nassau toward a structurally balanced budget.
Nassau County is one of the richest counties in the country. Mr. Johnston said the county has vast financial resources, including a "huge taxable base" that would provide ample revenues -- even as Long Island, where they county is located, faces a severe economic downturn.
What concerns Mr. Johnston, as well as several Nassau finance officials, is the political deadlock that has prevented the county from implementing a budget plan.
Recently, a bipartisan finance panel issued a report recommending the issuance of up to $100 million in general obligation bonds. The report also advocates a motgage-recording tax to generate nearly $53 million in revenue, county finance officials said.
On Monday, all three Republican members of the county's Board of Supervisors approved the plan, with the modification of reducing GO deficit bonding to $75 million. The three also would continue the county's austerity program of union concessions and county job eliminations.
Yesterday, however, the three Democratic members of the board indicated that while they approve of the mortgage-tax increase, they want to drastically reduce the level of deficit financing proposed by the Republicans, said Bruce Nyman, the Democratic supervisor of the City of Long Beach.
Mr. Nyman said both he and Lewis Yevoli, Democratic supervisor for Oyster Bay, will only approve a much smaller bond issue. Benjamin Zwirn, a Democratic supervisor from North Hempstead, refuses to accept any deficit financing, Mr. Nyman added.