County Executive Bellone Announces Bond Rating Upgrade For Suffolk County

S&P Ratings upgrades County bond rating from 'BBB+' to 'A-'

Print Email

Suffolk County Executive Steve Bellone

Photo by: Suffolk County

Suffolk County Executive Steve Bellone has announced that credit rating agency, S&P Global Ratings, has upgraded the County’s bond rating from 'BBB+' to 'A-' with a positive outlook. The upgrade reflects the continued commitment to improve the County’s finances through government efficiency, fiscal discipline, operational reforms and by building reserves that protect taxpayers and provide a cushion against future economic downturns.
Earlier this year, due to the County’s ongoing budgetary management and discipline, S&P Ratings upgraded the County’s financial outlook from negative to positive. In this latest report, S&P stated “The outlook reflects our view that if Suffolk can continue passing structurally balanced budgets and maintain its commitment to improving reserves, we could raise the rating further during our two-year outlook horizon.”
“This positive news validates that our fiscally responsible approach to budgeting is working and moving Suffolk County in the right direction. Even as we were forced to confront unexpected crises from Superstorm Sandy to COVID-19, we made the tough but prudent decisions to maintain fiscal discipline and protect the taxpayer,” said Suffolk County Executive Steve Bellone. “I want to thank Comptroller John Kennedy and my partners in the County Legislature for working together in a bi-partisan fashion throughout the COVID-19 crisis and in the adoption of this budget, prioritizing the implementation of our budgetary reforms, which has helped make this upgrade possible.”
Presiding Officer Rob Calarco said: “Today's announcement comes on the heels of a challenging economic period in which Suffolk County prioritized smart spending without compromising the essential services our residents depend on. I am incredibly proud to have played a role in maintaining balanced financials in partnership with County Executive Bellone and all of my colleagues in the legislature.”
Suffolk County Legislature Minority Leader Kevin McCaffrey said: “The improvement in the County Bond rating is a product of a cooperative effort between the County Executive, Comptroller and the County Legislature. The Republican Majority stands ready to work with all levels of Government to ensure this is the first of many Bond Rating upgrades.”
According to S&P, the bond upgrade reflects the significant improvement to the County’s finances following sales tax revenue recovery and receipt of federal funding, offsetting losses due to the economic fallout of the pandemic. S&P Ratings credited the County with improved financial management and budgeting practices, including the use of surpluses in ways that will allow the County to maintain more stable finances in the longer term.
As noted in the report, the County’s improved finances have eliminated all cash flow borrowings in 2021 and the County does not intend to issue any notes in 2022, a significant improvement according to S&P. This measure will save taxpayers approximately $10 million next year. S&P concluded that Suffolk has “an improving financial profile that will likely strengthen if the economy remains resilient and the county adheres to its improved financial practices.” In line with wider expectations nationally, the agency expects Suffolk's economy will continue its strong recovery.
Over the course of the last year and a half, Suffolk County has taken several steps to mitigate the financial emergency caused by the COVID-19 pandemic and protect taxpayers. In September, County Executive Bellone released the 2022 operating budget which prioritized protecting taxpayers and securing the County’s financial future. The 2022 operating budget froze the County Tax for the 10th year in a row.
The 2022 budget included several financial measures designed to protect taxpayers in Suffolk County, which S&P viewed positively:
  • Funded the County’s Tax Stabilization Reserve Fund at the highest level in its history
  • Pays off $197.2 million in pension amortization debt, generating interest savings of $20.2 million
  • Funds $11.8 million of contractual salary deferrals
  • Funds $138.3 million of contingency reserves funds for payroll and health care costs, property taxes, and other needs
  • Pays off the sale/leaseback of the H. Lee Dennison Building.
These fiscally responsible actions will help lower debt service costs and eliminate the need for short-term borrowings, both of which will ultimately save taxpayers tens of millions of dollars.
Prior to the pandemic, County Executive Bellone had worked for more than 8 years to overcome a massive financial crisis that he inherited at the start of his administration. In his first few months in office an independent team of financial experts reported that the County was facing an accumulated deficit of approximately $500 million and a $200 million annual structural budget gap.
Working together with the Legislature, County Executive Bellone was able to improve the County’s finances by eliminating both the deficit and the structural budget gap. The County consolidated departments, worked with labor unions to obtain significant healthcare expense savings and implemented best practice financial reforms and performance management measures to make government more efficient.
S&P highlighted the County’s reform efforts in its report stating, “the county has managed to find efficiencies by leveraging technology to streamline processes such as payroll and procurement.”
The result of all these efforts was that in 2019 the County achieved a structurally balanced budget with an operating surplus for the first time in more than a decade and has done this now for three consecutive years.