The Nassau County Board of Supervisors on Tuesday approved a $1.9 billion budget for the 1993 fiscal year, including a controversial plan to sell $65 million in deficit bonds.
The budget for fiscal 1993, which begins Jan. 1, emerged as part of a deal worked out between Joseph N. Mondello, the Republican supervisor of Hempstead, and Lewis J. Yevoli, the Democratic supervisor of Oyster Bay.
Under the terms of the agreement, the county's 1993 budget will include the $65 million sale of deficit bonds, but not the mortgage recording tax increase originally proposed by County Executive Thomas S. Gulotta. The mortgage tax was designed to provide a revenue stream for the deficit bonds.
The budget ended months of political deadlock among members of the board, equally divided between Republican and Democrats. County officials said the budget would eliminate the county's 1992 deficit and bring financial stability back to the fiscally strapped county.
In October, Moody's Investors Service cut the county's bond rating to Baa from A, citing the political deadlock that prevented the county from dealing with its budget problems amid a stiff regional recession.
Moody's did not return telephone calls seeking comment about the effects of the budget deal on the county's credit rating.
In a joint statement, Mondello and Yevoli termed the agreement "a very real first step toward eliminating the county deficit and returning Nassau to fiscal health."
"The budget ... takes the first critical step toward renewed fiscal health for Nassau County," the statement says. "By freezing property taxes, cutting spending, and eliminating the proposed mortgage tax ... we are ensuring that the residents of Nassau County will continue to enjoy first-rate services from county government."
The board approved the budget 4 to 2, with two Democratic members remaining opposed.
Under the agreement, the county said it will reduce spending by $42 million from the level first proposed by the county executive, trim the number of proposed new employees in 1993 by 600, not lay off existing county employees, and sell the deficit bonds.
The county received legislative approval from the state Legislature to sell deficit bonds last summer. However, the politically divided board refused to adopt the plan, proposed by Gulotta, a Republican.
For the first time in about 75 years, the Republicans have not held a majority on the county's Board of Supervisors. As a result, the county executive's plan to close Nassau's budget gap came under fire from the three Democratic board members after the county received legislative approval.
In addition to the $65 million in deficit bonds, the budget is balanced through a transfer of a $31 million surplus from the police budget to the county's general fund and the sale of land worth $13 million.
