FAIR Weather Forecast for County’s Credit

Outsider’s view of FAIR plan sunny

Fitch Ratings, a corporate entity based in London and NYC which monitors and reports on governmental credit status, is providing an optimistic outlook in relation to MonCo Exec Maggie Brooks’ FAIR plan.   

MonCo’s outstanding credit bonds, previously on watch, have been upgraded:

Fitch Ratings has affirmed at ‘BBB+’ and removed from Rating Watch Negative Monroe County, New York’s (the county) approximately $463.3 million public improvement bonds. The bonds are general obligations (GOs) of the county, payable from an unlimited ad valorem tax pledge. The Rating Outlook is Stable.

The rating improvement directly corresponds with County savings realized under FAIR:

…the plan includes the county’s enrollment into New York State’s Medicaid Swap Program, which allows the state to intercept a fixed portion of all future county sales tax receipts in exchange for providing Medicaid program costs . . . Fitch considers the plan key to restoring the county’s financial health and circumventing the need for one-time revenue sources to achieve balanced operations.

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For fiscal 2008, the county’s formal enrollment into the State’s Medicaid Swap Program is expected to produce a budgetary savings of approximately $28.3 million. Combined with the additional revenue enhancements expected to yield approximately $18 million, and including the proposed property tax rate reduction, the county now forecasts structurally balanced operations for fiscal years 2008 and 2009. While the amount of sales tax revenue shared with the county’s underlying city (Rochester), towns, and villages will remain unchanged, Fitch notes that school districts throughout the county will instead realize a reduction in sales tax revenue under the new program.