Dane County announced its national bond rating has been lowered from AAA to AA status.
New York-based Fitch Ratings issued a statement on Tuesday saying the primary reason for the lowered rating is the deterioration of the county’s reserve budget levels between 2008 and 2009.
What it means for the county is higher interest payments on borrowed money.
County Supervisor Tom Stoebig said although the county’s 2009 budget had a projected reserve amount of $3.2 million, lowered income from declines in items such as sales tax and planning and development permits have pushed the county’s general and reserve budgets into deficits. County estimates project both to be in the red on Jan. 1.
Topf Wells, chief of staff for Dane County Executive Kathleen Falk, said the lower rating is frustrating but manageable. Falk is preparing the county’s 2010 budget, but he said borrowing levels likely will be reduced, and the additional interest only amounts to one-tenth of 1 percent.
Over the past four budgets, the county averaged borrowing $29 million. The added interest on an AA rating would add $29,000 to that total.
Mark Campa, senior director of Fitch, said it likely will take a couple of years for the county to rebuild its reserve budget to a point where the AAA rating will be restored.