Moody’s reports that the City of Charlottesville is on its “Possible Downgrade” list:
Anyone smarter than I am willing and able to talk about the possible ramifications?
Hat tip: VARBuzz
The chance of the U.S. having its credit rating downgraded is pretty good, even if an agreement on the debt ceiling is reached. But Moody’s has also placed on “Watchlist for possible downgrade” the AAA ratings of 162 local governments in 31 states, with the heaviest concentrations in Virginia and Massachusetts. (Emphasis mine.)
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What happens is that our borrowing costs increase. We will be discussing this at our Council meeting tonight. As you may know, we rather jealously guard our AAA bond rating and it’s highly frustrating that fiscal ineptitude on the federal level has the potential effect of threatening the credit-worthiness of communities like Cville and Albemarle. Hopefully fiscal sanity will prevail and the threat will blow over.
Thanks, Dave. I do know about the City’s guarding of the AAA rating … it’s quite valuable and I have more and more buyer clients who are evaluating localities’ fiscal houses as part of their evaluative processes.Â
This matters, on many levels.Â
It seems most days that the federal level does more harm than good.