Moody’s Investors Service downgraded Suffolk County, N.Y.’s general obligation debt to A2 from A1 and maintained a negative outlook.
The downgrade, which affects $1.4 billion in outstanding debt, was due to the county’s failure to meet projected fiscal 2012 year-end estimates, despite its deficit reduction plans and use of non-recurring revenues in an attempt to balance the budget, Moody’s said Thursday. The county’s fiscal years correspond to calendar years.
Moody’s also expressed concern about the county’s narrow liquidity due to recurring operating deficits, which have significantly reduced reserve levels.
Finally, Moody’s is concerned about the current year’s structural operating deficit.
Moody’s negative outlook is due to the ongoing use of non-recurring revenue adjustments and failure to implement meaningful spending reductions.
Representatives of Suffolk County did not immediately respond to a request for a comment.
Fitch Ratings rates the county A and Standard & Poor's rates it A-plus with a negative outlook.
