Fitch Affirms & Removes Erie County, New York's 'BBB-' GOs From Watch Negative.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. affirms and removes Erie County, NY's (the county) 'BBB-' rated general obligation (GO) bonds from Rating Watch Negative. The Rating Outlook is now Stable. The rating action affects approximately $423 million of outstanding GO bonds. The rating action on the county's GO bonds follows the successful private placement of $80 million in revenue anticipation notes (RANs) last week, tomorrow's expected signature by the governor of legislation creating the Erie County Fiscal Stability Authority (ECFSA), and the $0.25 increase in the county sales tax sales tax, levy on the sale of goods or services, generally calculated as a percentage of the selling price, and sometimes called a purchase tax. It is usually collected in the form of an extra charge by the retailer, who remits the tax to the government. as of July 1. RAN receipts will ease expenditure needs in July and August and the sales tax increase will fund debt service on a deficit financing deficit financing In government, the practice of spending more money than is received as revenue, the difference being made up by borrowing or minting new funds. The term usually refers to a conscious attempt to stimulate the economy by lowering tax rates or increasing planned for later this year. Finally, the existence of the ECFSA, given the success of other similarly structured oversight boards in the state, should help stabilize the county's financial position over the long term. Fitch downgraded the county's rating to 'BBB-' last month following a report released by the Office of the State Comptroller (OSC O.S.C. n. short for Order to Show Cause. (See: Order to Show Cause) ) enumerating the size of the county's 2005 budget gap and identifying significant growing out-year imbalances. The 2005 operating deficit estimated by the OSC at $118 million, or 12% of the 2005 budget, will be addressed by the issuance of deficit funding bonds later this year. Liquidity remains very low despite RAN proceeds. Fitch's rating definitions are available on the agency's public web site, 'www.fitchratings.com'. Published ratings, criteria and methodologies and relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from this site, at all times. This document will remain on the public site for seven days. |
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