Local Government Bond Downgrades: Wall Street Journal


Yesterday the Wall Street Journal profiled a number of municipalities that have been hit with what are termed as massive downgrades of their debt. When such things happen as they are increasingly, the municipalities are adversely effected with new borrowing and refinancing of old debt that is maturing.

The bottom line when a downgrade happens works for cities the same way that a credit score drop works for individuals. The interest rate paid on existing debt can increase and borrowing to do maintenance or new development becomes more expensive or even impossible to secure.

When more of the dollars in municipal coffers is consumed to service debt then less is available for quality of life spending or even for basic services. Luckily Evansville was not on this list but between 5 and 35 municipalities per month have felt the sting of a massive downgrade during the last two years.

Please refer to the entire article on the link below.



  1. We best do what we can to hide from the scary (and corrupt) eye of the S+P. If the interest rate on our shiny new arena goes up, we’re in some trouble.

    • Obama gives billions of dollars to the Black Panthers, the unions, and ACORN, who in turn return the money to Obama in the form of campaign contributions, and you think Standard and Poors is corrupt? Are you naive, or merely mentally retarded?

      • I didnt say anything about Obama, nor did the article. Maybe you’re the one who should get your head checked?

        S+P gave AAA ratings to subprime mortgage-backed securities, which greatly contributed to our first financial collapse. They certainly are corrupt. That doesn’t mean Obama and the rest of our politicians arent corrupt, but you’re the one who changed the subject.

        Must be having a bad day.

  2. For more years than I care to recount I have been repeating the idea that what we had was a spending problem, not a taxing problem.

    From Washington to Indianapolis, and right on down to Evansville those who were advocating for increased spending were under the mistaken assumption that there was no limit to the taxpayer’s ability to service government debt.

    If you took a stance against the big new school project, or the big new municipal entertainment complex, you were branded with the label of “nay sayer” or “resistant to change”.

    If the spending had been controlled then, we would not be in this mess now. A lot of this debt was contracted for at a time when data was showing that we were heading into a recession that was being driven by a correction in real estate prices, commercial and residential.

    Some misguided individuals, a couple of prominent local ones come to mind, thought they could spend their way out of the recession, adding debt on top of debt.

    So, now that the net assessed valuation of Vanderburgh county real estate has taken a plunge, and we have lost Whirlpool and other jobs, one has to ask why those few people who cautioned for fiscal responsibility in all branches of government were not given the respect they deserved?

    Our government is only as good as the individuals filling the positions of council members, trustees, and board and commission members. It is the individual ethical behavior and fiscal responsibility of these individuals that is the ONLY guarantee we have against poor government and financial disaster.


    • Just thought to remind you, as if you need reminding, of what happens when the net assessed valuation of all taxable real estate goes down: taxes go up. You can run, but you can’t hide!


  3. Look around and tell me that that Trust has not been betrayed by many currently in Power,–it can not be denied! We are all witnesses to the Weinzapfel Puppets.

    PS. We are not counting the opinions of those enjoy the public teat and their denials directly tied to That Fact. “You shall know them by their Protests”.

Comments are closed.