Who’d expect a wealthy county withღ the nation’s highest average property taxes to have trouble paying its bills? Yet꧙ that’s precisely Westchester’s dilemma — and all three of the big credit agencies have now dropped its credit ratings in response.
Tuesday, Fitch and S&P both trimmed the county’s AAA grade to a AA+; Moody’s had already lowered it and this week declined to jack it back up. The problem, per S&P: doubts about Westchester’s “ability to sustainably align revenue and expendit꧂ures and rebuild reserves.”
The county dipped into its reserve funds to “balance” its budget two years running, and new County Exec George Latimer just raided them again to finance retroactive pay hikes for county employees. The reserves are now slated to sink to as low as $70 million, down from $140 million at the start🍸 of last year. That would put them at just 4 percent of operating costs, or half the 8 percent target. This year’s budget is also in the red, and the county faces another gaping hole next year.
Yet the lower credit grades may mean higher interest costs, which will only wors💖en the budget woes.
Some blame🌄 the red ink on former County Exec Rob Astorino’s decision to freeze (sky-high) property-tax levies; others point to the county Legislature’s refusal to go along with his plans to find offse༺tting savings. Either way, the shaky fiscal situation makes this a dubious time to hike employee pay (even if it hadn’t been raised in seven years).
Astorino’s freeze is dead: The current budget bumps up county levies 2 percent, and L💝atimer wants to up it again next year. Yes, local school budgets eat much of the property-tax revenue, and Latimer can point to the fiscal jam as requiring tough medicine. But tax-socked residents need relief, too.
Which means he and local school districts need to redouble their efforts to slow spending. And do so quickly — before the downward spir🍸al is impossibl𒉰e to stop.