Rockland County, N.Y.’s Legislature last week passed a resolution to impose a new 4% tax on utility bills to help close the county’s $21 million budget gap.

The resolution, which does not require New York State legislation, took effect Friday.

County Executive C. Scott Vanderhoef estimated the 4% surcharge would generate $5.8 million for the last seven months of 2012.

Vanderhoef pointed out in a statement that 20 counties in New York already impose the surcharge.

The county’s previous plan to close the gap included a sales tax increase, but that did not receive the required approval from the state.

Moody’s Investors Service recently downgraded the county’s general obligation debt three notches to Baa3 from A3.

Moody’s said the downgrade reflects Rockland’s significant budget gap, which places heavy pressure on its financial operations and liquidity.

The county, about 15 miles from New York City on the west bank of the Hudson River, has about 311,000 residents.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.