By James Fink
December 23, 2011
December 23, 2011Wall Street rating agency Standard and Poor’s Financial Services LLC has raised Erie County’s bond rating from BBB+ to A- for its general obligation bonds that cover myriad projects and county business.
At the same time S&P affirmed Erie County’s fiscal outlook as “stable.”
Both are far cries from the “red and green budget” days of six years ago that led to the county’s finances being overseen by a state-appointed fiscal stability authority, or control board.
“I am glad to see that S&P has, again, recognized the financial progress that Erie County continues to make,” said Erie County Executive-elect Mark Poloncarz, the current county comptroller.
Standard & Poor’s took note of several factors including the county’s strong unreserved general fund balance that tops $27.3 million, the approval of four-year fiscal plan that runs through 2015, a stable, local economic base coupled with below average unemployment rates.
But there are some fiscal red flags, according to Standard & Poor’s, including Erie County’s reliance on the unpredictable sales tax revenue as one of its primary sources of income and new state limitations on property tax growth. The latter refers to the 2 percent property tax cap Gov. Andrew Cuomo instituted this summer. It is also concerned about rising Medicaid and pension costs that cloud the county’s fiscal picture.
“While S&P was encouraged by the projected budget surplus this year, they appropriately point out that we still likely will see a net reduction of fund balance for the year,” Poloncarz said.