Fitch Downgrades Nassau County, N.Y., to A from A-plus

Fitch Ratings downgraded Nassau County, New York’s general obligation and county guaranteed Nassau Health Care Corporation bonds to A from A-plus on Tuesday.

A total of $1.75 billion in long-term debt is affected. Nassau County has about $1.5 billion in GO debt and $259 million in county-guaranteed NHCC debt. Fitch maintains a negative outlook on the debt.

Nassau County continues to suffer from low reserve levels and has repeatedly used nonrecurring revenues to make its budget work in recent years, Fitch analyst Karen Wagner  said. It has also relied on tax and revenue anticipation notes. In 2012 note borrowing equaled 16% of receipts.

Wagner also cited weak intergovernmental relations between the county administration, the county legislature and the Nassau County Interim Finance Authority, which impede the county government’s ability to make wise fiscal choices. NIFA has had the ability to approve or deny the county government’s borrowing since January 2011.

The county faces significant liabilities if tax refund and wage freeze suits are ultimately decided against it, Wagner wrote.

Moody’s Investors Service rates Nassau County GO debt A2. Standard & Poor’s rates it A-plus.

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New York
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