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Long IslandColumnistsJoye Brown

Bond ratings vs. tax hikes: false choice in Suffolk

Suffolk County Executive Steve Bellone talks about the

Suffolk County Executive Steve Bellone talks about the 2016 budget during a meeting with reporters in Hauppauge, Sept 18, 2015. Credit: Ed Betz

Aides to Suffolk County Executive Steve Bellone told reporters that the county would rather suffer a Wall Street bond-rating decline than raise taxes beyond the state's property tax cap.

But that's a false choice.

Yes, raising taxes is politically unpopular -- so much so that Suffolk residents ranked controlling property taxes as the county executive's Job One in a Newsday/News 12/Siena College poll last month.

And a report released Tuesday by Reclaim New York, an anti-tax think tank, shows that for Long Islanders the struggle is real -- with taxes and cost-of-living expenses here at "alarming" levels.

But dealing with property taxes as a political issue doesn't help.

In announcing his proposed budget plan for 2016, for example, Bellone pointed out that residents would see no general fund property tax increase for the fourth year in a row.

But Bellone didn't mention that police district taxes would go up 3 percent next year under his proposal.

Or that the increase, should it be approved by lawmakers, would be the fourth hike in a row.

Or that the higher tax was necessary to fund labor agreements reached between his administration and Suffolk's police unions.

It's a dance of tax deception that ought to drive Long Islanders crazy.

But it ought to make elected officials uncomfortable, too.

Because with Suffolk and Nassau in fiscal stress, straight talk on taxes would boost officials' credibility when they seek to cut services or coax the new revenue necessary to bridge budget gaps.

Last week, after Standard & Poor's dropped Suffolk's bond rating by a notch, Bellone's aides said they'd rather see a drop than significantly raise property taxes. On Wednesday, aides pointed out that the drop brought the Wall Street rating agency's ranking in line with other rating agencies.


But that doesn't mean the ratings decrease can, or should, be minimized or ignored. Nassau, one of the richest counties in the nation, did that during the 1990s, right up until its ratings tanked at a step above junk-bond status.

According to Suffolk's website, the last time S&P gave the county an A, which is a step below "high quality," was in 2000 -- when the county was climbing back from years of BBB "medium" quality grades.

But more telling than Suffolk's downgrade from A+ to A is the agency's rationale for bringing it down.

S&P credits the Bellone administration for making "substantial progress in rebalancing its operations" since 2012, when Suffolk declared a state of fiscal emergency. It also notes that the county has multiple fiscal strengths.

Nonetheless, the rating dropped -- and S&P revised its long-term rating outlook to negative -- because Suffolk, as of 2014, had "nearly 10 years" of adjusted operating deficits.

"This consistently negative performance has significantly reduced budgetary flexibility to what we consider to be very weak levels," according to the S&P report.

The agency warned that it could lower Suffolk's rating further, by as much as two notches, within two years "barring evidence of substantial improvement."

Which means Suffolk will have to continue doing what's structurally, reasonably and responsibly necessary to make the county's finances work.

In that, there's no choice.


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