Last week, as I was busy running here there and everywhere (and preparing for the draft on Friday), Ed Mangano and Charles Wang released the new areener numbers for all to see. Critics continue to sharpen their knives, but let's take a deeper look...
First, a Rumor
On Monday, as my friend BD Gallof reported on Twitter, a reliable source close to the Nassau Democrats intimated that the group will drop its active opposition to the referendum.
This does not and should not imply support, because there is a wide gulf between not actively fighting something and supporting it. There are many potential reasons why this could have happened, but for right now I'll reserve judgment and say that the Democratic Party dropping active opposition could pave the way for passage...and set up a deal to achieve the required super-majority. Either way, the Democrats are a political organization, and they will do what they think is best for them politically, but that's speculation for another post.
Also, despite this potentially very good news, let's not forget that NIFA is still out there, and at least one of its members isn't happy.
(Blogger's Note: Newsday owns the copyright for that article, I'm merely re-posting it for informational purposes)
The areener deal seems at first blush like fairly straightforward revenue sharing between the Islanders and Nassau County. Under the deal, Nassau County receives 11.5% of all gross revenue from all events at Nassau Coliseum, including concerts and shows (from which the Islanders do not currently reap profits, despite being in charge of ticket sales through Islanders Entertainment).
In addition, Charles Wang and the Islanders are required to make minimum payments of $14 million to Nassau County per year, regardless of total figures, toward covering the estimated $26 million in debt service per year on the proposed bond issue. Supporters call this an unprecedented step, and say taxpayers will not be exposed, but opponents, such as the Nassau Democrats from 2 weeks ago, were quick to blast the proposal as a "tax."
Is it a Tax?
So - who's right? Does the proposed bond issue represent a tax?
The answer, rather than a hoped-for yes or no, is more of a maybe, depending on certain outside factors.
The Democrats blasted the play as a $58/family/year tax 2 weeks ago, but that is not entirely true. $58 would be the maximum tax exposure per year per Nassau County family if the facility never made any money and Charles Wang never paid a cent. Now that a minimum payment is contractually obligated, that $58 number is flat-out false.
However, unlike the Underpants Gnomes, we are also good at math around these parts, and $14 million is not enough to cover the $26 million in debt service. Therefore, at this point, it's possible that this could represent a tax.
Now - how much of a tax? Let's take the numbers we know, and extrapolate out using some old high school-level algebra:
Minimum Payment: $14 million per year
Tax Revenue Per Year: $2 million per year (estimated from 2006 Nassau County Lighthouse Project Study)
Total Debt Service: $26 million per year
Maximum Per-Family Tax Burden, Assuming No Payment Ever: $58
So, we can now extrapolate, assuming taxes from the Coliseum are put into an Al Gore-style "lockbox" and the minimum Nassau County will have for the debt service is $16 million a year:
10/x = 26/58
(Blogger's Note: I used these numbers because if these numbers are coming in taxpayers would have to cover the remaining $10 million of debt service)
26x = 580
x = $22.31
Therefore, the maximum tax exposure, assuming no other revenue aside from the minimum payment and the tax on the facility, is $22.31.
The areener referendum could become a tax, but as I mentioned before, we must look at the full picture. Is it worth killing a major economic engine for the area, putting thousands out of work, and shuttering small businesses that depend on Coliseum traffic for the risk of spending up to $22.31 a year in tax? Are we being penny-wise and pound-foolish with our future? Would development happen without an areener there? If not, what is the cost of doing nothing?
These are all things we as voters must weigh.
Now that the details are out, the get out the vote drive has begun informally. Please register to vote in Nassau County if you have not already done so, and make your voice heard.
We have still heard nothing about NIFA as to whether the August 1 election will be allowed to go forward - expect more on this from me in the coming days.
We now have our details, and I've been able to counter the belief that there is a $58 per year tax exposure guaranteed for the referendum. The key now is to take a deeper look at this to see exactly what it would mean for the residents of Nassau County.
One thing's for sure: if the Democrats truly are dropping their opposition to this referendum, the key now will be to get out and VOTE to put pressure on NIFA and make it clear that this can't be killed.
As always, never a dull moment on Long Island.....I almost pine for dull moments sometimes.
I want to run some numbers to see if/how the numbers can work without the public paying any money. I also want to share my views and opinion on a few things surrounding the issue.
As always, if you have topic suggestions or a guest post to write, please email me.