NEW YORK (Reuters) - The head of New York's Nassau County on Wednesday proposed across-the-board budget cuts and layoffs in order to meet $121 million in spending cuts that he said are needed to bring the budget back into balance.
County Executive Edward Mangano said cutting spending was the only way to comply with the state overseer's demand that he close a deficit. The alternative, he said, is a property tax increase of 21.5 percent.
Nassau County, a wealthy enclave just east of New York City, was taken over by the state in January after the state overseer, the Nassau Interim Finance Authority (NIFA) declared that Mangano's roughly $2.6 billion budget was out of balance.
Mangano's proposed budget is subject to approval by NIFA, which was set up in 2000 to rescue the county from a budget crisis.
Nassau County already has high property taxes and Mangano, a Tea-Party-backed Republican, had campaigned on an anti-tax pledge.
A NIFA board member noted that any policy decision, such as a tax hike, would be left to the county executive.
"We're just really an umpire calling the balls and the strikes," NIFA board member Leonard Steinman said. "NIFA has not suggested and will never recommend a property tax increase; that is a policy decision that remains with the county executive."
Mangano's proposed budget cuts include $60.5 million of "employee-related" cuts, of which $50 million would come from laying off workers and abolishing vacant jobs.
A Mangano spokesman was not available to say how many people would lose their jobs or offer other details.
The proposed across-the-board cuts total $40 million; Mangano also proposed to reduce the county's tax refund liability by $20 million.
Mangano also said that NIFA should also exercise its authority to impose a wage freeze on county employees, halting pay increases scheduled for April 1.
Nassau County has an exceptional problem with its property tax system as homeowners often are owed sizable refunds. NIFA has blocked Mangano from borrowing to meet this debt by saying the money raised could not be counted as revenue.
"Since the last thing Nassau families need in these tough economic times is a double-digit property tax increase, I will submit a revised financial plan next week that cuts county spending by over $121 million," Mangano said in a statement.
The county legislature's presiding officer, Peter Schmitt, signaled his support, though he added he will wait to see Mangano's final plan.
"I believe Mr. Mangano had no choice when presented with a substantial tax increase or reducing the size of county government," Schmitt said.
(Reporting by Joan Gralla; Editing by Leslie Adler)