Response to Moody's Investor Services downgrading Monroe County's credit rating is drawing reaction from both sides of the aisle. Democrats are bracing for financial doom while Republicans plan to stay the course.
Just three years ago, Moody's upgraded Monroe County's credit rating. That rating has dropped again, changing the county's financial outlook from stable to negative. That could affect the county's more than $450 million in outstanding longterm debt.
Moody's criticized a county budget that has relied on one-time revenues, warning of an operating deficit for a second consecutive year.
"Moody's is looking for this county to raise taxes as an opportunity to stabilize our budget, but we have other opportunities to stabilize our budget through one time revenues, recurring revenues and recurring expenditure reductions and that's our plan," said Robert Franklin, Monroe County CFO.
Democrats say that's what got the county into this mess. They believe legislators on both sides of the aisle must work together to solve this problem.
Democratic legislators say raising property taxes is a last resort. They point to a number of proposals Democrats have made in recent years that would save the county more than $8 million a year. Those proposals were rejected by the Republican majority.
"This bury our head in the sand attitude that we have in the legislature and the county administration has got to change. We have real financial problems and Moody's now, you might say, has certified that we have real financial problems," said Democratic legislator Paul Haney.
George Conboy of Brighton Securities says as municipalities go, Monroe County's credit rating is still fairly good. He says the county is still investment-grade rated and believes investors will still want to buy those bonds.
"We still have a broad tax base, we have a good, healthy economy. Moody's did say that overall growth in our economy that could add to the tax base could solve this problem and I'm sure the county hopes that's the case. We do see an improving economy and we think that down the road this will not end up being a significant problem for our county," Conboy said.
If the credit rating is downgraded again, Conboy and Haney agree the counties ability to borrow money for important projects will become more costly and in some cases may not be possible.
On the other side of the spectrum, the City of Rochester has been assigned Moody's best quality rating.
Rochester has the designation of MIG (Moody's Investment Grade) 1. The city's Aa3 rating on its long-term obligation debt was reaffirmed.
Moody's analysis of the city's growth predicts that ITS financial position is expected to remain stable, despite economic challenges. The predictions were based on established cash flow and superior liquidity support, among other things.