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S&P Downgrades Westchester Debt Outlook To Negative

Westchester County Executive Rob Astorino released ratings from three credit agencies showing the county's finances rank stronger than any county in New York despite a downgrade in Standard and Poor's global ratings for debt outlook.
Westchester County Executive Rob Astorino released ratings from three credit agencies showing the county's finances rank stronger than any county in New York despite a downgrade in Standard and Poor's global ratings for debt outlook. Photo Credit: Jon Craig

Westchester continues to receive the highest credit ratings of any New York State county after three credit agencies independently affirmed the county’s strong credit rating, with both Fitch Ratings and S&P maintaining ‘AAA’ ratings and Moody’s maintaining an Aa1, County Executive Rob Astorino announced on Thursday, Nov. 30.

However, Standard and Poor's global ratings downgraded its outlook for Westchester's debt from "stable" to "negative," while citing a reliance on so-called "one-shot" revenues to balance its annual county budgets. S&P said there was about a 30 percent chance of a negative scenario playing out in the future,.

Moody’s and Fitch, meanwhile. both gave Westchester County a stable outlook.

Astorino, who served for eight years as county executive, kept the property tax levy flat, but needed to rely on borrowing for operating expenses. State Sen. George Latimer, a Democrat who defeated Astorino for the top county job on Nov. 7, criticized Astorino for using short-term budget gimmicks to balance annual operating costs.

“Three independent groups have looked at the county’s finances and have re-affirmed that we are on solid fiscal footing because of our responsible fiscal management,” Astorino said. “Westchester County remains the highest rated county in New York State for good reason, and that enables us to save money for taxpayers.”

The county’s high bond ratings allow taxpayers to save millions of dollars a year on interest costs associated with borrowing along with refinancing bonds, according to Jerry McKinstry, a spokesman for Astorino.

While all three ratings agencies noted the challenges faced by the county, such as uncertain sales tax revenue and high pension expenses, they each praised the county’s careful management of its finances.

Fitch, in its affirmation, noted that its AAA rating reflected the county’s superior financial resilience given its stable general fund reserves along with Westchester’s strong regional economy and relatively low unemployment when compared with state and national averages. Fitch also cited Westchester’s strong ability to close budget gaps afforded by the county’s highly stable reserves.

S&P cited the county’s economy, financial policies and practices, budgetary flexibility, liquidity and institutional framework, though raised concerns about how the county would be affected by federal tax reform – should it be passed by Congress – potentially affecting state and local income tax and mortgage deductions. S&P rated Westchester County well compared with the federal government.

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