Nassau County bond ratings get upgrades from three Wall Street credit rating agencies
The Nassau County seal. Credit: Howard Schnapp
Three Wall Street credit rating agencies upgraded Nassau's bond rating this week, citing the county's healthy reserves and a string of budget surpluses.
Nassau ended last year with $887 million in reserves and has cut its legal and tax refund liabilities by a half-billion dollars since 2021, S&P Global Ratings said in a report.
Nassau's finances have improved significantly in recent years. Experts have cited the one-time influx of federal pandemic aid and a decision in 2021 by the Nassau Interim Finance Authority, a state board that controls county finances, to restructure more than $1.1 billion in county and control board debt.
Nassau has received a total of $385 million in federal pandemic relief aid. After the debt refinancing, the county was able to postpone payment of $435 million in short-term debt.
Fitch Ratings, Moody's Ratings and S&P Global all boosted county bond ratings in separate reports issued Tuesday.
With reserve balances high, Nassau is positioned “to cope with economic headwinds stemming from inflation and high mortgage interest rates,” S&P Global said.
NIFA chairman Richard Kessel argued the control board's oversight played an instrumental role in the ratings upgrades by providing “constant monitoring of county spending, county budgets” and oversight of “modest” labor agreements with major unions.
“There's a long way to go in continuing to monitor the county very closely,” Kessel told Newsday. “Obviously the county received a lot of money in COVID aid and is retaining a significant amount of that money. But ultimately that money is going to have to be spent, and the county is going to have to go back to traditional budgeting.”
The rating agencies raised some concerns about county finances.
Nassau owes more than $6 billion in health care benefits to retirees, auditors have estimated, and there is no money budgeted for the long-term expense.
NuHealth, the public benefit corporation that runs Nassau University Medical Center, is running out of cash, auditors have warned. Nassau backs more than $100 million in hospital system debt.
The county also could experience “budgetary pressure” if it has to provide NuHealth with subsidies, Moody’s analysts wrote.
The rating agencies also cited opportunities for Nassau to boost sales tax revenues that underpin the county's $4.1 billion annual budget.
S&P Global noted Las Vegas Sands’ proposal to develop a $4 billion resort and casino on the Nassau Coliseum site. The project needs several municipal approvals, as well as a license from the State Gaming Commission. The commission isn't expected to award licenses until late 2025, state officials have said.
Nassau County Executive Bruce Blakeman, a Republican, said in a statement: “I am gratified that the rating agencies recognized that our mixed approach of economic development and fiscal conservatism has produced excellent results …”
But Nassau County Legis. Delia DeRiggi-Whitton (D-Glen Cove), the minority leader, said Blakeman has been “hoarding funds” and accused his administration of slow-walking distribution of money from the state's legal settlement with opioid manufacturers.
In February, two Wall Street credit rating agencies boosted Suffolk County's bond ratings. Suffolk had $1 billion in reserves that could be tapped in a fiscal crisis, the agencies wrote.
Correction: Bruce Blakeman is the Nassau County executive. A previous version of this story omitted his first name and title.
Scott Eidler is a deputy editor for the towns department at Newsday. Scott has worked at Newsday since 2012 and previously covered municipal government and education.
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