Standard & Poor’s Ratings Services today lowered its bond rating again for Rockland County to one-level above junk-bond status after the state Legislature last week failed to give the struggling county the ability to borrow to pay off growing debt.
The state Senate didn’t pass a bill that would have let Rockland borrow up to $80 million by the end of 2013. The measure was caught up in a fight between the Assembly and Senate over a similar package for Nassau County.
As a result, S&P today lowered the county’s long-term rating to ‘BBB-’ from ‘BBB+’. (h/t to Bloomberg’s Freeman Klopott.)
“We lowered the rating on the county’s GO debt due to the continued erosion of its financial position and once strong reserves,” said Standard & Poor’s credit analyst Danielle Leonardis in a statement. “In addition, projections show a negative balance in the county’s total and unreserved general fund balance for fiscal years 2011 and 2012.”
The statement said that the county can’t issue deficit-reduction bonds because the Legislature didn’t act. S&P said that some of the savings the county is seeking must come through labor negotiations and are uncertain.
“This leaves uncertainty about bridging a potential $40 million budget imbalance for fiscal 2012,” the rating agency said.
The downgrade comes on the heels of previous fiscal warnings from S&P and Moody’s.