Prospect of new trains helps Tampa bond rating

Tampa's municipal bond ratings may be getting propped up by efforts to add high-speed and commuter rail. At the same time, they may also be bogged down by high unemployment and continued stress on the city's housing market.

Fitch Ratings recently assigned a grade of “AA” to a $39.9 million bond issue supported by the half-cent Community Investment Tax approved by Hillsborough County voters in 1996. The tax supports a range of public services, yet is mainly associated with the construction of Raymond James Stadium, where the Tampa Bay Buccaneers and University of South Florida Bulls play football.

A report by Fitch notes solid bondholder protection, lack of additional leveraging plans and a history of conservative financial management as positives in its rating. However, it points to unemployment above 12% and home sales weakness as contributing to declining taxable values, revenue weakness and budgetary pressure.

Also noted in the report is the anticipated collection of $121.9 million in property tax revenue in fiscal 2011, which is $44.3 million less than what was received in 2007. Tampa expects taxable values to continue falling over the next several years, but not at the 11% to 12% rate experienced in the last two fiscal years, Fitch states.

On the other hand: “Longer-term growth prospects are supported by an excellent regional transportation network, featuring interstate highway access and domestic and international air service at Tampa International Airport,” the report says. It points to federal funding of a high-speed rail system connecting Tampa, Lakeland and Orlando as being a driver for regional job growth in years to come.