Suffolk County, N.Y., Executive Steve Bellone, looking to close a massive budget gap of up to $530 million, said Monday he has forged an agreement with legislators that includes changing how the eastern Long Island county pays pension benefits.
Monday’s proposal, which Bellone called initial mitigation measures, includes spreading escalating pension benefit costs over 10 years to save roughly $66 million. Other measures include more borrowing, increases in fees, and spending cuts.
Bellone’s comments come about a month after he declared a fiscal emergency. A task force he appointed shortly after taking office in January said Suffolk could face a budgetary shortfall of $530 million by the end of 2013.
Bellone said Monday that the initial measures would save about $160 million. “This gets us nearly a third of the way there,” he said.
Shortly after Bellone’s fiscal emergency declaration, Moody’s Investors Service lowered the county’s general obligation rating two levels to A1 from Aa2, with a negative outlook, and Standard & Poor’s placed its AA long-term and underlying ratings on credit watch with negative implications.
The county last week sold $37 million of tobacco bonds, with proceeds to offset debt used for capital projects and to inject funds into a liquidity reserve account.
