Downgraded Credit Ratings Raise Budget Questions

Two different investment firms have downgraded Harrison's credit rating during the last four months, but Harrison Mayor/Supervisor Joan Walsh said this week that the ratings will change little as the town is hoping to keep borrowing to a minimum anyway.

"They were not unexpected," Walsh said of the credit downgrades. "We knew they were coming."

Standard and Poor downgraded Harrison's rating in June, followed by Moody's in late July. The decreases will make borrowing money more difficult for the town, according to Walsh, but will not lead to wholesale service cuts in the town budget.

"We have made substantial cuts—substantial cuts," she said. "We really aren't spending anything."

Although both services lowered Harrison's rating, only one—Standard and Poor—gave the town a negative outlook. The town still faces a $3.7 million budget gap, part of the reason for the downgrades.

Another cited problem was overspending in six consecutive budget years, specifically 2008 and 2009. Walsh maintained this week that she has cut several employee positions and curbed spending as a whole since taking office in 2008.

The Moody's report, which gave a positive outlook, cited those cuts along with reduced spending in more recent budgets as a reason for optimism.

Walsh pointed out widespread issues including decreased property values and sales tax income as issues that have cut into town finances in recent years, but said spending has decreased every year during her administration.

"It's not as crucial as it would be if everyone else wasn't facing the same problem," she said.