Moody's Investor Service reduced its rating from Aa2 to Baa2 on $93 million of Sarasota County's bonds to finance the purchase of environmentally sensitive lands. The new rating is at the low end of investment-grade ratings and comes with a negative outlook reflecting the drop in the tax base.
The county property appraiser's office's preliminary estimate for the Jan. 1, 2011 tax roll shows a 6.5% decline from last year to $39.5 billion. That's down from a 2007 peak of $62.4 billion. Issued in 2005 and 2008, the bonds are secured by a limited property tax of 0.25 mills due to expire in 2029.
As Sarasota County's rating drops, Florida's rating recently improved. Standard & Poor's Rating Services upgraded the state of Florida's outlook from negative to stable citing the new state budget, which includes increased reserves. The change means the state will be able to borrow at lower interest rates and have easier access to credit.
“The outlook revision reflects our view of the state's improved revenue environment and a fiscal 2012 budget that is structurally balanced and improves reserve funding levels,” concludes the report.
The state holds a AAA rating, the highest possible credit rating. The revised outlook indicates that a credit rating downgrade is not likely to occur immediately.
The rating agency gave the state's long-term education bonds a AAA rating while maintaining a AA+ rating for legislative bond issues. The state's general obligation bond rating remains at AAA.