Fitch Ratings raised its outlook on Suffolk County, N.Y.'s bonds and notes to stable from negative after the county said it reversed its deficit.
Fitch rates the county's GO bonds A and its revenue and bond anticipation notes F1.
The county's anticipated surplus for past fiscal year is key to the new outlook, Fitch director Karen Wagner said on Tuesday. The county is projecting a $13 million general fund budget surplus. When the police district fund is added to the general fund, the budget is expected to have a $10 million surplus.
Suffolk County's fiscal year aligns with the calendar year.
The surplus in the general fund in 2013 compares with a $154 million shortfall in 2012. The improvement is due to strong sales tax growth and higher than estimated property tax revenue together with reduced expenditures, Wagner said.
Sales tax revenues rose 6.8% in 2013 from 2012.
The county expects a slight decline in short-term cash flow borrowing in 2014, but Wagner said she expected the county's heavy reliance on cash flow borrowing to continue for the next several years.
In the fall the staff of New York Comptroller Thomas DiNapoli named Suffolk County the third most fiscally distressed local government in the state out of more than 1,000 counties, cities and towns.
Suffolk County is the eastern half of Long Island. With 1.5 million residents, it is the most populous county in New York outside of New York City.
The county's GO bonds are rated A-plus by Standard & Poor's and A2 by Moody's Investors Service.
The county has roughly $1.4 billion in outstanding debt.
