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A Property Tax Drop Alone Is Unlikely To Erode Local Governments' Credit Quality May 11
Standard & Poors, May 2011
Abstract
It is difficult to overstate the importance of the approximately $16.5 trillion housing sector to the U.S. economy, financial markets, and public finance entities. Many local governments are reliant on property tax revenues and the assessed valuations (AV) of properties these revenues are derived from. Still, it would be far too simplistic analytically to assume that declining valuations, even to the extent seen in certain areas recently, can be the sole cause of credit quality deterioration in the local government sector. Standard & Poor's Ratings Services believes that a weak real estate market is just one of several sources of current credit pressure in the municipal sector. While we recognize that the credit quality of local governments will continue to...
Companies mentioned in this report are: Genesee Cnty
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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