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Judge Denies Nassau’s Request to Block NIFA Takeover

Ronald Stack, chairman of the Nassau Interim Finance Authority, left, speaks to the media during a meeting in Uniondale. (AP Photo/Seth Wenig)

A judge has denied Nassau County Executive Ed Mangano’s request for a preliminary injunction blocking a state watchdog panel from taking over county finances, but the case is not over yet.

Justice Arthur Diamond issued his ruling Monday on two of three claims in the lawsuit between the county and the Nassau Interim Finance Authority (NIFA), which voted in January to issue a control period out of concern for a projected $176 million deficit in the $2.6 billion county budget. The judge put off a ruling on Nassau’s third claim, that NIFA’s move was “arbitrary and capricious.”


“In this court’s view, a balancing of the equities tips decidedly in favor of NIFA,” Diamond wrote in the 30-page decision. He dismissed the county’s claims that the takeover was unconstitutional and enacted after NIFA’s authority to do so was said to have expired.

Diamond declined to dismiss the third claim. Nassau has until March 29 to further make the case that NIFA allegedly acted inconsistently when overseeing budgets proposed by Mangano, a Republican, and his predecessor, County Executive Tom Suozzi, a Democrat. NIFA has until April 18 to file its response to those additional arguments.

The debate is over the practice of counting as revenue proceeds of bonds floated to pay for property tax assessment challenge settlements. NIFA was formed in 2000 after the county nearly went broke from excess borrowing to repay such tax grievances.

The judge had stayed the NIFA takeover after hearing arguments from both sides in the case at state Supreme Court in Mineola last month. The stay effectively extended a deadline for the county to submit a revised budget to NIFA. After the ruling came down, the six-member board asked Mangano to issue a revised budget by Friday.

Mangano, who has maintained that his budget is balanced, called the decision disturbing, but did not say if he would appeal. “I am particularly concerned with its impact on reforms I put in place,” he said in a statement.

NIFA issued a statement praising the decision.

“We are confident that we will prevail on the remaining issues if the county decides to continue with this litigation,” the statement read.

It was unclear if the county would meet the Friday deadline, as Mangano called for a summit next week between NIFA and the leaders of the four unions that represent county employees, from whom he said he plans to seek concessions.

“Mangano needs to stop wasting taxpayer money on costly lawsuits,” Legis. Diane Yatauro (D-Glen Cove), the minority leader, said in a statement. “He needs to do what he should have done last fall, which is to put realistic numbers into his budget.”

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