NYC's Former Budget Director Heads East to Fix Nassau's Finances

(Bloomberg) -- As budget director for Mayor Michael Bloomberg, Mark Page managed New York City’s finances through the aftermath of the September 11 terror attacks, the Great Recession and Hurricane Sandy.

Now Page, 69, has taken on a new assignment: balancing the books in Long Island’s Nassau County, which has struggled because of a dysfunctional property-tax assessment system, growing employee pension and health costs and a reliance on borrowing.

Page -- professorial, deliberate and possessing a dry sense of humor -- was hired by Nassau’s newly elected county executive Laura Curran, a Democrat, in late December after working as a consultant to the county’s fiscal overseer.

“We’re very lucky," said Curran, Long Island’s first female county executive. “His experience and knowledge made it a very easy selection."

While Page isn’t taking the reins of Nassau’s finances at a time of crisis, the county has struggled for decades to balance its budget. Despite Nassau’s wealth (it has the highest median household incomes in New York), the county has been plagued by financial mismanagement. A state board was created in 2000 to oversee the county’s finances because of years of short-term borrowing and one-time gimmicks to cover budget deficits.

Former county executive Ed Mangano, a Republican, cut staff and renegotiated labor contracts, but he was unwilling to raise property taxes and couldn’t finish an overhaul of the county’s property assessment system, one of the main reasons for its weak finances.

Nassau has borrowed as much as $100 million annually to pay property tax appeals. It’s one of two New York counties responsible for paying the full award, even though the revenue raised by property taxes is split between the county, towns and school districts.

Curran has pledged to fix the property assessment system and limit the state oversight board’s power over county budgets.

Page doesn’t have the pedigree of a career bureaucrat. His father, Walter, was the former chairman and president of JPMorgan Chase & Co. His mother Jane was the grand daughter of John Pierpont Morgan Jr., according to articles in the New York Times and the New York Observer.

Instead of following in his family’s footsteps to Wall Street, Page chose public service.

After graduating from Harvard College and New York University’s School of Law, he joined New York City’s Office of Management and Budget as a lawyer in 1978 during Mayor Ed Koch’s first term. He quickly rose to general counsel, serving in that position until Bloomberg appointed him budget director in 2002.

The terror attacks of Sept. 11 delivered a shock to the city’s economy, which had been slowing since the bursting of the tech bubble. Facing an $8 billion budget deficit, the city raised property taxes, borrowed, cut spending and relied on federal and state aid to get through its worst fiscal crisis since the 1970s.

Page insisted that commissioners find savings and improve operations, even in good years. The city fought requests for higher wages from police and teachers unions in arbitration hearings and cut spending on libraries, child care and senior centers to eliminate budget gaps.

Using conservative revenue forecasts, and techniques like prepaying debt service, Page and his team salted away money when times were flush, providing a cushion during the Great Recession.

At the same time, Page protected Bloomberg administration spending priorities such as education, said Dennis Walcott, former schools chancellor and deputy mayor. Bloomberg is the founder and majority owner of Bloomberg News parent Bloomberg LP.

“Mark was able to walk a very thin tightrope," said Walcott.

Curran is aiming to complete a property reassessment that started under Mangano by 2019. The county’s property assessments were frozen in 2011 and that has led to a large number of grievances. Most of those who appealed got relief, causing an unfair shift in the tax burden to lower-income residents, Curran said.

Nassau owed $500 million in tax claims at the end of 2017, and borrowing to pay the appeals is “strangling the budget," Curran wrote in a March 15 letter to the county’s state overseers.

Curran has proposed borrowing $60 million this year to pay claims. Last year, the county made most of its $90 million in refunds by drawing down reserves.

“This administration is committed to get the county into an ongoing condition where it’s not spending more than it’s taking in," Page said. “On the other hand, the factual circumstance is that we have this large overhang of claims and paying it immediately out of current resources is really not there."

The county, whose almost 2,400 police officers were paid an average of about $149,000 in 2016-2017, according to the Empire Center for Public Policy, has also deferred pension payments, racking up a $210 million bill to the state. All of the county’s major union contracts have expired and must be renegotiated.

“Keeping control of spending -- through the contract negotiations or further reducing headcount or services, in the absence of increased revenue -- is going to be important," said Moody’s Investors Service Analyst Robert Weber.

Last month, Curran proposed a revised $3 billion budget that included $55 million in cuts, savings and new revenue, which will mostly be used to pay for a legal settlement to two men wrongfully convicted of rape in 1984.

Perhaps Page’s biggest contribution to the county may be his ability to attract talented professionals to Nassau County government, given his long ties to New York City.

“Any organization that has an opportunity to get Mark Page involved is only going to benefit from his time and focus," said Pat McCoy, who used to work for Page and is finance director at the Metropolitan Transportation Authority.

©2018 Bloomberg L.P.

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