Bloomberg’s coverage of the Suffolk County financial emergency.
“You never want a good fiscal crisis to go to waste,” said Lawrence Levy, executive dean of the National Center for Suburban Studies at Hofstra University in Hempstead, New York. “If Suffolk doesn’t deal with its deficit in a way that Wall Street bond raters feel adequately addresses the problem, then they will find themselves where Nassau was a decade ago — facing a junking of their bonds.”
…Suffolk relies on short-term borrowing to pay bills before tax receipts arrive and a failure to access the market would be devastating, Levy said. This year the county is set to borrow about $650 million to meet its cash-flow needs.
… The value of taxable property has declined 16 percent since 2008, according to county bond documents.
Sales-tax revenue, which makes up almost half of Suffolk’s budget, has stagnated, and spending on “economic assistance” has increased 20 percent to $643 million this year from 2006.
Bellone’s predecessor, Steve Levy, and the Democratic- controlled county Legislature declined to raise property taxes or make politically unpopular cuts to social services, public safety and employee benefits, Hofstra’s Levy said.
“Suffolk got into trouble because of an obsession in cutting the general-fund tax rate and a refusal to cut spending on popular and important programs,” Hofstra’s Levy said.
I don’t know the history of Suffolk county, but a quick search produced this release from November, 2011, when the executive vetoed tax increases that the county’s legislature had passed:
Suffolk County Executive Steve Levy said the County Legislature has ‘a second chance at protecting the taxpayers’ by sustaining the many line-item vetoes of the Legislature’s budget amendments he issued today – an action which would not only reverse the body’s day-after-Election Day $12 million tax hike but would produce a $3.6 million tax cut. [site]
Read: Suffolk County Seeks to Avoid Takeover Fate That Befell Neighboring Nassau – Bloomberg.