When Monroe County credit ratings fall - taxpayers pick up the tab - a fact unknown to Monroe County Leadership
Check out Joe Spector’s article this morning.
See Monroe County’s investment rating has dropped. Standard and Poors dropped the financial picture outlook rating to “Negative Outlook”. Fitch Ratings dropped its Monroe County rating in a comparable category to “Rating Watch Negative”. Recently Moodys dropped the County’s actual credit rating to a Baa2.
So what does that mean? Well, Monroe County will be forced to pay higher interest rates to investors when Monroe County borrows money. Meaning creditors will “earn” a higher interest rate.
Being that this is Monroe County not to worry. County spokeman John Durso is on top of it and supplies these words of brilliance. Words that demonstrate an absolute lack of understanding how bond creditors get paid.
“We are concerned about the interests of property taxpayers on Main Street, and unfortunately that does not sometimes coincide with the interests of Wall Street,” said county spokesman John Durso. “This news is not unexpected, but it will not stop us from continuing to move forward to protect property taxpayers in the future.”
Yea, screw Wall Street. We are protecting taxpayers.
Well, John certainly knows better. See, who actually pays the extra money accrued by the higher interest rates? Um, Not John Durso, - the Taxpayers.
Bonds are borrowed in the taxpayers name - the tax payers
Oh let’s see if these unnamed officials are correct.
County officials estimate that the change in status may mean only about $12,600 in additional costs each year for the $75.9 million bond, which will be spread over about 20 years. They estimate that the county may be able to get an interest rate of roughly 4.5 percent on the bonds in the open market.
read it again and watch the hedging.
“…estimate…may only mean…They estimate …may be … of roughly…”
At face value, what can Monroe County do with an extra annual $12,600 savings each year for 20 years?
What debt could you pay down or programs enable?
Maggie Brooks and crew can’t do that now with credit ratings that continue to head in the wrong direction.
And since when can you trust “County officials” to give proper estimates when it comes to things like this, especially in an election year. That $12,600 estimate will amazingly become $126,000 or $1,260,000 after November 6. My God this Durso guy is a piece of work. The only property taxpayer being protected by County leadership is him! Does the GOP really think we’re this stupid!
Yep,
Thanks. I wanted to point out the hedging and after I read your comment realized I didn’t nail it so modified the original post.
Our Maggie’s administration is amazingly like the Bush administration–they say what they want, when they want and they think they get away with it.
But I believe that the number of people who see through the crap is growing, right? Let’s hope so.
[...] what happened with Monroe County’s bond rating in July (you read our analysis at the time here): Fitch Ratings has assigned a ‘BBB+’ rating to Monroe County, New York’s (the [...]