U.S. Public Finance
Today’s municipal market is increasingly complex and challenging. We understand that to make decisions with confidence, you want new insights about credit risk. Whether you are an issuer, intermediary or investor, you need information about this risk that’s based on in-depth market knowledge, forward-looking analyses and transparent criteria. And that’s where our insight is essential.
U.S. Midterm Ballot Measures Prioritize Relief and New Spending
- Yesterday’s ballot measures reflected growing voter interest in affordability, accountability, and targeted spending.
- The passage of Amendment 3 in Florida is one example where future flexibility to raise revenue or manage budgets could constrain credit quality for local governments as property tax assessment exemptions increase.
- However, passage of Proposition RTM in California will provide new revenue tied to specific uses for Bay Area transit systems, offering them a more stable credit rating trajectory.
- Collectively, the measures identify a year where the referendums landscape is defined by dedicated funding, often with strings attached, and structural revenue constraints rather than broad fiscal discretion typically left to governing bodies and management teams.
Under Pressure: The Growing Impact Of Affordability Issues On U.S. Public Finance Credit Ratings
Over the past several weeks, S&P Global Ratings has published its “U.S. Affordability” series, which takes a deep dive into how affordability issues are affecting each U.S. public finance sector. Affordability has pressured credit ratings and contributed to negative sector outlooks in not-for-profit public power and electric cooperatives and in small water utility systems, to name some examples.
Policy shifts and broader macroeconomic trends are trickling down to U.S. states and local governments, affecting everyday pocketbook issues while resulting in outcomes with measurable effects on credit quality.
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