Sharon's Credit Rating Downgraded by Moody's

By Jeff Fish

Sharon’s credit rating on $7.8 million in town bond debt was downgraded by Moody’s Investor’s Service, according to the Boston Business Journal.

The article, published Thursday, criticized Sharon for “freezing its residential levy at $20.45 per $1,000 of assessed property value, a move that dropped Sharon having the highest residential rate in the state in fiscal 2011 to the fourth highest today.”

“It seems the homeowners... have grown tired of their town’s reputation one of the most onerous tax climates in the commonwealth, and in recent years have demanded that local officials reel things in,” the article said.

Moody’s cited the town’s “‘resistance’ to raising its tax levy its tax levy to capacity” as a contributing factor to the downgrade. They also cited “dwindling reserves and expenditure growth.

The town’s general fund balance has declined by 35 percent “amid four straight years of deficits” since 2008 and the stabilization fund has shrunk from around $2.5 million in fiscal 2007 to “virtually nothing today. Borrowing per capita has jumped 57 percent since 2010, rising approximately $3400 per resident as of last year.”

A source at Town Hall told the Boston Business Journal that the “downgrade is unlikely to change much when it comes to borrower costs or investor demand for its debt securities.”

What do you think about Sharon’s credit downgrading? Do you think taxes should be raised, lowered, or stay the same? Do you think the Boston Business Journal’s assessment of Sharon is fair? Let us know in the comments below.