Local Governments Face Another Headwind – State, Federal Budget Tightening

There has been a significant conversation regarding Federal and state government debt, with the question of “how much debt is too much” not drawing a conclusive response. Japan, with a debt to GDP level of 229%, seems to defy those who argue for balanced budgets. Greece, by comparison, stands at 176% while the US is at 104%. Certain state debt problems, such as New Jersey, have been declared mathematically unsolvable while cities such as Chicago scramble to pay for increasingly difficult to meet pension demands. As governments potentially button up their fiscal houses, the downstream impact could be felt in the local level. A November 15 Moody’s report titled “States, Local Governments and Public Enterprises Exposed to Downstream...