More shoes began to drop in Suffolk County, N.Y., as Standard & Poor’s on Tuesday placed its AA long-term and underlying ratings on credit watch with negative implications.

The previous day, Moody’s Investors Service lowered Suffolk’s general obligation rating two levels to A1 from Aa2, with a negative outlook.

Both moves come a week after the eastern Long Island county, staggering from a task force report that projected a $530 million deficit, declared a state of fiscal emergency.

County Executive Steve Bellone has said Suffolk could run out of cash by April. His emergency declaration enabled him to fast-track the authorization of a $90 million sale of revenue anticipation notes.

The county Legislature approved the Ran sale Tuesday, after Bellone presented a certificate of necessity.

According to Daniel Berger, a senior market strategist at Thomson Reuters, market activity continues to reflect heightened concern about Suffolk County.

Two blocks of the county’s GO bonds traded with higher spreads. The first bonds were 5% coupons maturing in 2018 at 115 basis points above Municipal Market Data’s triple-A GO scale, and the second bonds were 4% coupons with a 2015 maturity which traded at 103 basis points above the MMD scale.

Bellone, speaking after the Moody’s downgrade, said the action came as no surprise. “Moody’s emphasizes that for years, Suffolk County has been running an operating deficit which has been papered over through one-shot revenues. Those days must come to an end,” he said.

Standard & Poor’s on Tuesday cited a “one-in-two chance” that it could lower the county’s rating one or more notches within 90 days.

The agency anticipates one of three potential outcomes: swift county action that immediately grasps liquidity and structural imbalance problems and could lead to a rating affirmation with maintenance of a negative outlook; a “credible” plan with partial adjustments that could lead to a one-notch downgrade; or the lack of such a plan and a downgrade into the single-A category.

Standard & Poor’s analyst Lindsay Wilhelm saw the emergency declaration as a plus. “We believe it could enhance the county’s ability to swiftly implement adjustments to its fiscal situation,” Wilhelm said.

County legislators had expected rating action last week, when they heard members of the seven-person task had painted a dark picture of the county’s finances.

“What does this do for our bond ratings? Obviously it’s going to drop them,” said Edward Romaine, R-Riverhead.

According to task force chairman Richard Halverson, the county deficit was $33 million in fiscal 2011, then escalated to $148 million and $349 million in the following two years.

Halverson is a former New York City deputy comptroller and former assistant deputy director of the New York City Financial Control Board, which oversaw the city’s budget in the aftermath of its mid-1970s financial crisis.

Moody’s said the downgrade and negative outlook “reflect sharply narrowed liquidity after recurring operating deficits have significantly reduced reserve levels.”

The emergency also enabled Bellone to impound 10% of available money from each department. He has spent the following week talking with department heads about budget cuts and layoffs, and with county and state lawmakers.

“Our singular focus is how to solve the crisis, and this report provides the foundation for that,” said Bellone, a former Babylon, N.Y., supervisor who took office in January.

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