Moody’s Investors Service today downgraded Rockland County’s $240 million in debt from A3 to Baa3, and warned the county could face further downgrades.
“The downgrade of the long- and short-term ratings reflects a significant budget gap of more than $40 million in the county’s current year, placing heavy pressure on its financial operations and liquidity,” Moody’s said. “The county had developed a plan to close this gap, but has failed to gain state approval for various revenue enhancements, including an increase in sales and other taxes, and has not garnered concessions from collective bargaining groups that would have resulted in expenditure savings.”
It’s the latest hit for the suburban county and another sign that Rockland’s finances are heading to troubling territory. Nassau County is under a state control board, and Suffolk could be next. And maybe Rockland too.
It could run out of money in months, the state Comptroller’s Office has warned.
Rockland County Executive Scott Vanderhoef wanted the state Legislature to increase the county sales tax by 0.375 percentage points to fund operations this year and to repay a loan next year. But the state Senate won’t do it, and now county leaders are looking at massive, mid-year budget cuts.
“The review for downgrade reflects Moody’s belief that the county will be severely challenged to close the current year budget gap given the significantly weak financial and liquidity positions. It may also face challenges to market access for upcoming note issuances,” the Moody’s report says. Our review will also incorporate the county’s ability to get state approval and financing for its deficit reduction bonds.”