Warren County Treasurer Michael Swan informed area leaders this week that the county's credit rating has been boosted due to recent cutbacks in government expenses and ongoing efforts to streamline government operations. The hike in the bond rating means the county may save substantially on future borrowing costs. This news follows Swan's earlier announcement that sales tax revenue is higher than forecast and is now at record levels — a strong indicator for the local economy.
County supervisors got a double-dose of good news this week about finances — along with an indication the economy is improving substantially.
Warren County’s sales tax receipts increased 7.2 percent in January over the same month last year, which means there’s an additional $223,181 received this month alone to offset the county government’s treasury.
The increase followed a record-high year of sales tax revenue for 2012 of $47,597,490, a 2.6 percent increase over the prior year — which itself was an 8.2 percent increase over 2010. These figures exclude Glens Falls — the city’s sales tax is figured and collected separately. Half of the county’s sales tax revenue is paid to the towns, split according to each town’s proportion of the county’s total assessed property valuation.
Following this welcome news was the announcement Friday Feb. 15 by county Treasurer Michael Swan that the county’s bond rating has been hiked one level, which will mean considerable savings when the government borrows money. The nation’s leading credit rating agency, Standard & Poor’s, boosted Warren County’s rating from A+ to AA-, based on improved financial condition.
This change will lower the county’s interest rate by one to 1.5 points, saving the county tens of thousands of dollars per $1 million borrowed, Swan said Tuesday. The county, however, has no pending plans to borrow more money, he added.
“This rating increase demonstrates that we’re on the right track, we’re making good financial decisions, and we’re in good financial shape,” he said, praising county leaders as well as employees for cutting costs.
Standard & Poor’s new credit report on the county, issued Feb. 11, reads, “The county's financial position remains strong and has improved substantially in the past four years,” noting the county’s projected $2 million surplus accruing as of Dec. 31.
The report observed how the county has been building up its financial reserves since a low point reached in 2009, and its leaders conservatively estimate sales tax and occupancy tax revenues while the revenues have continued to rise.
The report notes that reductions in employees and reorganization of duties in recent years, combined with the sale of the bicounty trash plant, have contributed to the county’s financial success despite prevailing financial pressures.
The credit agency praises the county’s multi-year financial planning — and the pending sale of Westmount Nursing Home, which should save the county $500,000 to $800,000 per year.
Overall, Standard & Poor's revised its assessment of Warren County's financial management practices to "good" from “standard.”
The agency also praises the county for avoiding cash-flow borrowing, providing a cushion for unexpected expenses and stabilizing taxes. The report also describes the county’s total debt burden as low, noting it is $2,090 per resident, and was obtained at favorable interest rates.
“Warren County has made significant structural adjustments to its budget and is on a sustainable path to maintain strong reserves,” the report continues.
That financial conservatism was behind the county officials budgeting sales tax revenue of $42 million in 2012, so they’ll have several million dollars to offset anticipated increases in fuel, employee retirement and health care costs.
County supervisors and area economic officials have said the increase in sales tax is due to prosperous retail activity, strong vehicle sales and robust summer tourism.
Swan said that the increase in home sales and rebound from the recession means people are burying more major appliances and spending more on home improvement.
“We’re headed in the right direction,” Swan said.
Assemblyman Dan Stec praised the county leaders for their financial decisions leading to the credit rating hike.
“This is wonderful news that Warren County is on solid financial footing in challenging economic times,” he said.