Beaver County taxpayers lost out on approximately $1.2 million in potential savings during a recent bond refinancing because the county’s credit rating had been downgraded, according to county officials.
County Commissioners refinanced $64.8 million in bonds this week as a cost savings measure to help balance the county’s budget. Although the refinancing will reduce required debt payments by approximately $2 million this year and $1.2 million next, the overall savings are far less than they would have been as a result of the county’s lowered credit score.
The financial services agency Standard & Poor’s (S&P) downgraded Beaver County’s credit rating at the end of September from A- to BBB+ because the county’s ongoing expenses continue to exceed its ongoing revenues. S&P had similarly downgraded Beaver County last year due to its “persistent deficits.”
Although the Board of Commissioners voted last year to raise property taxes by 17%, the increase was not enough to properly balance the county’s budget. The Board had committed at the time to a series of governmental restructurings they said would make up the difference, but Commissioners ultimately failed to implement any of the changes.
The Board’s failure to execute their stated plans led to a continued “structural imbalance” in the budget that was a deciding factor in S&P again lowering the county’s credit worthiness rating, resulting in what officials say was loss of about $1.2 million in savings from this week’s bond refinancing.
County Commissioners are currently in the process of crafting the 2018 budget.