Oops! The playground of New York’s elite defaults on its debt

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As if Suffolk County, home of the Hamptons and playground of the rich and famous on New York’s Long Island, didn’t have enough financial problems already.

A regulatory filing on behalf of the county dated April 16 shows it accidentally missed an interest payment on some of its debt, including $76.1 million (R703m) of public improvement bonds, putting the county technically in default. Oops.

It is more of an embarrassing glitch than anything else. The missed payment – just $722.65 – would be small change for many of the county’s residents. It will buy you fewer than 20 butter-poached lobster rolls (not the most expensive thing on the menu) at Dave’s Grill in Montauk, a quaint fishing village on the island’s northern tip.

The county is wealthy, with income per capita well above the national average, but it has run into difficulty recently, declaring a fiscal emergency last year after an independent task force predicted a three-year deficit of $530m. The county could have a budget shortfall of as much as $250m by the end of next year, local officials said last month.

Fitch Ratings, the credit ratings agency, downgraded Suffolk County’s general obligation bond rating to A from A-plus last month. Fitch said it had concerns about the county’s ability to become financially stable, let alone reduce its big deficit. – Reuters


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