New York State Takes Over Finances of Wealthy Nassau County

This is a major shot across the bow. The New York State oversight board today (Jan. 26) seized control of Nassau County finances, as a story in the New York Times described in detail. Nassau County, on suburban Long Island, is one of the nation's wealthiest and most heavily taxed counties, but it failed to balance its $2.7 billion budget. The oversight board will have vast power to rewrite the county's budget and veto labor contracts, borrowings and other important financial commitments, according to the Times. Despite ample tax revenue, the county has resisted service cuts and the current leadership wouldn't raise taxes. The only other county in New York that has been taken over in modern times is Erie, the state's 24th wealthiest, where median household income is half that of Nassau, the state's richest county, according to the Times. Current leadership is threatening to sue the oversight board. Thanks to Matt Potter for alerting me to this story.


It will be interesting to see what the oversight board does. As always, the details of the outcome will be far more revealing than what is said at the initial announcement. Nassau County's predicament is typical of what affects most government entities that are in financial trouble: it is not a revenue problem but a lack of control on expenditures. Does the state of New York have a similar board to control the government in Albany? We shall see what happens there.

Then there is California and its cities and counties rapidly heading towards insolvency.

Nassau County officials are already fighting the board, threatening a lawsuit. Yes, what ultimately eventuates will be quite interesting. This may really be a move to embarrass Nassau into raising taxes. Best, Don Bauder

It is a "heavily taxed" county and described as having ample revenues, but it can't balance its books. If I lived there I would a)be looking for a new place to live, and b)refusing to vote to pay a red cent in additional taxes. These jurisdictions can, if they have the political guts, bring their expenditures into line with their income. New York is already one of the--if not THE--most heavily taxed state(s.) Are the people there really getting something superior for their backbreaking taxes? Many apparently think so. There has to be a tipping point when they refuse to accept any more tax burden. When will it come?

C'mon, Visduh, you know New Yorkers. They don't just think they are superior; they KNOW they are superior. So they are perfectly willing to pay higher taxe for the privilege of living in New York City and environs. Would Nassau Countians move out? Not the ones I know! Incidentally, I am only talking about people in metro New York City. Go upstate and people are not insufferably arrogant. Best, Don Bauder

Hey, hey, hey now Don. We're not all insufferable. I was born and raised in Brooklyn and now live in the Rockaways (Queens). In between I lived in San Diego for close to three years.

My wife and I have been looking for homes in Nassau and Suffolk and though home values have plummeted, property taxes there are still ridiculously high. It is not uncommon to see a 10,000 to 12,000 yearly tax bill on homes that are going for 350,000 or less. To be fair, the same can be said of Westchester (the first of the upstate counties), as well as Dutchess and Orange counties. The schools in these counties are supposed to be a lot better than NYC public schools. I have two kids and I know that many in my boat justify those taxes as being less than what it would take to put two kids through private school.

I don't think it will be politically possible for the state or counties to ask more of home owners at this point, so I guess they're going to have to start cutting.

The state does not have the power to veto the counties contracts-so I don't know what they are going to do except manage it differently.

It looks like there will be a legal battle over this and your point will probably be made by the ones fighting the seizure (make it quasi-seizure). Best, Don Bauder

You're right, Don. Noo Yawk City is the center of the Universe and worth every penny. The people who live there pay, pay, and pay more for the dubious privilege. They're welcome to it, and I wish they would stay there. I always thought it was a pack of displaced Noo Yawkers who descended upon LA in the 60's and put it on the road to ruin.

The cost of living on Manhattan may be 100 basis points above the next highest city. For example, if San Francisco is 200 and the national average is 100, Manhattan may be 300. (Have't seen the numbers recently.) Best, Don Bauder

Several years ago I used to temporarily work in New Jersey. You could tell how close you were to Manhattan by the mile by how rude the people were.

The cost of living in Manhattan is beyond reason. Unless you are wealthy, you feel like a pauper. San Francisco may be a world unto itself, but it is a very beautiful city and nowhere near as expensive.

Incidentally, I just saw some cost of living numbers. Manhattan is off the charts, but it is not as much higher as San Francisco as I had thought. Yes, I used too work for a New York company and had to go into corporate headquarters with some frequency. I used to walk around Manhattan and watch how those people hated each other. Best, Don Bauder

Let's not forget that San Diego has an awful cost of living as well fellas. And they don't have the salaries that you would get in NYC.

And please don't do the "Noo Yawker" thing. We don't all sound like Vinny Barberino.

I've been a subscriber to the Noo Yawker since college in the 1950s. But that doesn't mean I would want to live there. Best, Don Bauder

I agree with Mondo - the cost of living is not even close to par with salaries in San Diego. At least in New York you get paid well - and even if you don't, it's still a draw for many people because anything is possible in New York.

Yes, the cost of living in New York City is a good deal higher than it is in San Diego. Yes, average pay is higher, but the spread between the rich and poor is yawning. Wall Streeters get great pay. Many others don't, although New York City is highly unionized. Best, Don Bauder

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