Nassau County's plan to sell up to $250 million of tobacco-settlement bonds has evolved into a war of words between County Executive Thomas Gulotta and County Comptroller Fred Parola, as Parola criticizes Gulotta's use of a tobacco settlement securitization to fund a shortfall in revenues for the fiscal year 2000 county budget.
The Nassau County executive has proposed increasing the securitization of the tobacco settlement funds to $275 million from the initial proposal of $175 million, using $145 million of the securitization's proceeds to cover a deficit in the current fiscal year and raise $50 million for each of next three years to meet anticipated revenue shortfalls.
Parola has decried the use of non-recurring revenue to cover operating expenses, contending that the rating agencies have also called upon the county to curtail the use of one-time revenue sources to meet expenses.
"Spreading the use of tobacco funds over a three- or four-year period does not suddenly classify this as recurring revenues," Parola said.
The comptroller has been clamoring for the county to overhaul the process by which tax payers can challenge property tax assessments. Streamlining the process for handling challenges could bring in as much as $400 million and would save significant amounts that the county now has to pay out in interest on overcharged tax assessments.
Parola adds that he has no quarrel with securitizations by the county, it is the use of proceeds he is faulting.
Meanwhile, Gulotta has accused Parola of being a proponent of a "dramatic increase" in county school taxes. He also criticized the comptroller for proposing salary increases for some of his staff members as well as for himself, at a time that the county executive is calling for wage rollbacks as part of an expense reduction program to balance the budget.