Apr 14, 2009

Moody’s affirms A2 credit rating for Nassau - Cites Suozzi’s strong fiscal management

Moody's affirms A2 credit rating for Nassau

NEWSDAY

BY CELESTE HADRICK

April 13, 2009

After warning local governments around the country last week that their credit ratings could be downgraded because of the worsening recession, Moody's Investors Service Monday exempted Nassau from its negative outlook.

The national ratings agency affirmed Nassau County's current A2 credit rating with a stable outlook, said Lisa Cole, Moody's Nassau analyst. She declined to give the reasons until the agency issued its official news release.

"This is very positive news for us," said County Executive Thomas Suozzi. "We are really breathing a sigh of relief. We thought we were at risk like the rest of the country, especially since we're facing such tough times with our sales tax."

County officials say Moody's cited Nassau's active management of the county's finances.

After Suozzi warned in early February that he would lay off hundreds of workers, most of the county's unions agreed to concessions, subject to members approval.

He announced cuts in social services if the state did not approve moneymaking initiatives such as cameras at traffic intersections to catch drivers running red lights. Since then, both the state Senate and Assembly have approved red-light cameras.

Also, after Moody's expressed concern about Nassau's high level of variable rate debt, Suozzi moved to refinance $310 million to a fixed rate.

"We went in early and took action right away," Suozzi said. "It's very gratifying that an outside independent agency is looking favorably on the aggressive actions we are taking during these difficult economic times."

For the first time ever, Moody's put the entire local government sector on a negative outlook. Most at risk are those with a shrinking industrial base, declining sales tax revenue, volatile variable rate debt and high fixed costs, according to Bloomberg News.

Nassau is still facing a decline in sales taxes. Both Nassau and Suffolk reported last week that sales tax revenues plunged more than 10 percent for the first three months of this year compared to the same period last year.

Credit ratings determine how much governments and their taxpayers must pay to borrow money. Those with high credit scores pay less interest on their debt while those with low credit scores are forced to pay higher interest rates to sell their bonds.