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Moody’s Investors Service said yesterday that may downgrade Nassau County’s credit rating because county officials moved to block a state takeover of its finances, Bond Buyer reports.
Nassau County – one of the wealthiest and most heavily taxed in the state – is facing a budget shortfall of $176 million for 2011. A state oversight board seized control of the Nassau’s finances last week after the county failed to balance its $2.6 billion budget.
Nassau County officials responded Monday with a lawsuit that challenges the legality of the board’s decision and seeks an injunction to stop the takeover. County Executive Edward Mangano, a Republican, says Nassau’s finances aren’t that bad and insists that the state’s actions are politically motivated.
Moody’s analysts say the lawsuit raises questions “about governance and financial control” in the affluent NYC suburb. The ratings agency is now reviewing $1.4 billion in general obligation debt for a possible downgrade. If Nassau’s ratings are cut, the affluent county’s money problems are likely going to get much worse.
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