A credit rating service's decision to downgrade the Town of Oyster Bays bond rating could have both fiscal and political implications as the year progresses.
Newsday reported Wednesday that Standard & Poor's Rating Services had downgraded the town's bond rating to A from AA. In its report, Standard & Poor's cited the town's "failure to make the necessary budget adjustments to offset declining revenue" as its reasoning.
In simple terms, the decision could make borrowing money more expensive for the town. The lowered ratings (adjusted for both short-term and long-term bonds) make them less attractive to investors.
Newsday reported the town had an estimated general fund balance deficit of $655,000 last year and was planning to sell bonds to cover a $13 million shortfall this year.
Yet, the town's 2012 budget contains no property tax increase over the previous year.
Supervisor told Newsday that Oyster Bay is addressing the looming fiscal problems, which he blamed on the ongoing recession. The town is proposing a retirement incentive program; a public hearing on the proposal is set for June 19. Venditto said the board has fought increasing the tax burden on Oyster Bay homeowners.
