By Freeman Klopott and Brian Chappatta - 2012-06-27T04:01:00Z <\/p>\n
Nassau, New Yorks wealthiest county, can take lessons from Buffalo, its poorest city, on how to win back financial independence from a state oversight board. <\/p>\n
Eighteen months after Nassaus fiscal affairs were taken over, County Executive Edward Mangano failed last week to get permission from lawmakers to sidestep the state panel and borrow $40 million to pay tax refunds. Instead, the Long Island suburb of 1.3 million, which has seen its relative borrowing costs climb in the past month, will tap reserves. <\/p>\n
Buffalo, in contrast, is set to end nine years of New York oversight July 1, when its control board will shift to an advisory role. The city of 261,000 on the Canadian border achieved the goal by cooperating with the authority to balance its budget for three straight years while shrinking its debt by more than 25 percent. <\/p>\n
A control board takes away some political authority, but permits unpleasant decisions, said Howard Cure, head of research at New York-based Evercore Wealth Management LLC, which manages $3.5 billion. To get out from under its yoke, you need to maintain a structural balance. Nassau has a way to go to get there. Buffalo cooperated with its board to achieve one. <\/p>\n
Nassau has joined nearby counties Suffolk, home of the Hamptons beach towns, and Rockland in facing fiscal strains caused in part by flagging sales-tax revenue. The Nassau County Interim Finance Authority took control in January 2011 after ruling the countys budget had a gap of more than 1 percent of projected spending. <\/p>\n
NIFA wants Nassau to bolster reserves, end the use of one- shot revenue, reduce labor costs and avoid borrowing to cover property-tax refunds, the authority said when it took control. <\/p>\n
Nassau, whose $93,613 median household income is triple Buffalos, must get the authoritys approval to borrow and on contracts it negotiates with unions. About 30 percent of Buffalo residents live under the poverty level, and its median household income is the lowest of the states cities. <\/p>\n
The two municipalities have the same credit rating, at A1 from Moodys Investors Service, fifth highest. Buffalos has risen from Baa3, one step above speculative, when the control board took over in 2003. Its now the best in the citys history, according to Mayor Byron Brown. Nassaus rating was cut one step by Moodys in November 2010. <\/p>\n
As Nassau attempted this month to persuade state lawmakers to agree to a bill allowing it to issue bonds without NIFAs approval, demand for some of its debt weakened. The yield on an 18-year bond issued by Nassau County in April rose to 1.18 percentage points above top-rated debt on June 15, data compiled by Bloomberg show. Thats the widest since it was issued and up from 0.97 percentage point a month earlier. <\/p>\n<\/p>\n
See the original post: By Freeman Klopott and Brian Chappatta - 2012-06-27T04:01:00Z Nassau, New Yorks wealthiest county, can take lessons from Buffalo, its poorest city, on how to win back financial independence from a state oversight board. Eighteen months after Nassaus fiscal affairs were taken over, County Executive Edward Mangano failed last week to get permission from lawmakers to sidestep the state panel and borrow $40 million to pay tax refunds. Instead, the Long Island suburb of 1.3 million, which has seen its relative borrowing costs climb in the past month, will tap reserves Continue reading
\nNassau Freedom Revealed in Buffalo Losing Oversight: Muni Credit<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"