Bond Ratings Are No Excuse for High Taxes

justin-katz-avatar-smiling

Here we go again with the bond-rating blame game.

In order to refinance nearly $8 million of its debt, the Town of Tiverton asked Moody’s Investors Services to rate its bonds.  Moody’s rating of A1 was only the fifth-best rating possible, and was lower than other cities and towns in Rhode Island, so town officials took to theNewport Daily News to redirect blame (“‘Challenges’ cause bond rating to slip,” 12/10/15):

“Tiverton really didn’t stack up to the others,” [Town Treasurer Denise] Saurette said, [referring to a separate pool of Portsmouth, North Kingstown, and Burrillville,] “It was upsetting.  They see us as a potential liability.  It’s a black eye.  We didn’t do as well as we wanted to.”

The first excuse on the list?

Moody’s noted Tiverton’s use of the general fund surplus to offset the tax rate, and the ability of a taxpayers’ group to override recommendations made by the town’s Budget Committee, Saurette said.

A local politician took the finger-pointing one step farther:

“This is the beginning of what we warned would happen,” said Town Council President Denise deMedeiros, speaking of past elector budget petitions that were approved by voters at the annual financial town referendums in May that took money from the general fund surplus to offset the tax rate.

It is true that Moody’s mentioned Tiverton’s budgeting process and the results of the past two financial town referendum (FTR) votes — in which voters overwhelmingly supported smaller increases in taxes than elected officials wanted to impose.  But it’s simply not true that Moody’s reduced its bond rating for the town because of the 0.0% petition that voters selected for fiscal year 2015 and the 0.9% petition that won for fiscal year 2016.

Continue reading on Tiverton Fact Check.



  • Mike678

    Great article Justin. I wonder if the facts will get to the general public via the local papers….

Quantcast