Washington-area municipalities sweat out federal ratings downgrade
Local government officials are struggling to gauge the impact of the Standard & Poor’s unprecedented downgrade of federal credit even as Washington watches global reaction to its latest financial setback.
Will the ratings agency downgrade counties and states? Will the federal government’s predicament cost local taxpayers? And can local governments have better credit than the federal government?
“We are in uncharted territory,” Prince William County Board Chairman Corey A. Stewart (R) said. “No one knows what the ultimate long-term ramifications are. . . .But we know they’re going to be significant.”
Word of the S&P downgrade Friday shook local municipalities, many of which had justweathered the scrutiny of another rating agency, Moody’s Investors Service. Moody’s, concerned about the chaos surrounding the federal debt ceiling, had been reviewing the ratings of the federal government and municipalities with close ties to Washington