Suffolk County gets bond rating upgrades from Standard & Poor's, Moody's

Two Wall Street credit rating agencies have issued bond rating upgrades for Suffolk County while a third held steady, citing conservative budget practices and robust reserves.

The agencies, each with their own scoring system, provide independent analysis of the county's finances. The scores affect interest rates when the county, which has about $1.9 billion in debt, borrows for capital projects.

“We will continue to be fiscally conservative and build more efficiency into Suffolk County government,” Suffolk County Executive Ed Romaine, a Republican who took office in January, said in a statement.

Suffolk, with a $3.9 billion operating budget, has been buoyed in recent years by federal pandemic-related aid and higher-than-expected sales tax revenues.

The new reports show continuation of an upward credit trajectory that began in 2020:

• Standard & Poor’s on Thursday raised its rating from A+ to AA- and kept its outlook at stable.
• Moody’s Investors Service on Jan. 30 raised its issuer and general obligation limited tax ratings to A3 from Baa2 and its lease appropriation rating to Baa1 from Baa3. The outlook remains positive.
• Fitch on Tuesday affirmed its A- rating and kept the outlook stable.

S&P attributed the improved rating to stronger financial management and performance, historically high reserves, a sizable affluent economy and a manageable debt burden. The ratings agency noted the county has about $1 billion in reserves that could absorb a sudden decline in tax revenue.

"The stable outlook reflects the county's robust operating performance shown recently, leading to a substantially improved financial and liquidity position,” S&P Global Ratings credit analyst Victor Medeiros said in a statement. “This is the result of budgetary changes designed to achieve long-term structural balance, along with the county's commitment to improving reserves.”

Nassau and Suffolk finances benefited from the American Rescue Plan Act, the COVID-19 stimulus bill Congress approved in 2021. Nassau County received $385 million and Suffolk $286.8 million. Moody’s noted Suffolk has stopped borrowing for cash flow, but that it did not need to rely on ARPA money to do so.

Nassau County, with a $4.1 billion budget, has also seen improved bond ratings.

Moody’s in April upgraded the county for the second consecutive year, from an A1 to an Aa3 rating and affirmed a positive outlook. Fitch upgraded the county from an A to an A+ rating, a move not seen since 2005, county budget officials said. And S&P held steady on a rating of AA- and stable outlook.

By Vera Chinese

vera.chinese@newsday.com@VeraChinese

Vera Chinese joined Newsday in 2017 after working as an editor for the East End lifestyle publication northforker and a general assignment reporter for the New York Daily News.