S&P Downgrades Cambria County's Credit Rating Amid Financial Challenges

Cambria County has experienced a significant financial setback as S&P Global Ratings downgraded its general obligation bond rating from "A" to "BBB+" with a negative outlook.

 

This decision stems from consecutive budget deficits and concerns over the county's long-term financial management.

 

The downgrade reflects a material weakening in the county's financial flexibility, following two years of operating deficits and reliance on deficit financing to balance the budget.

 

Analysts have expressed apprehension that the county's current strategies may be insufficient to stabilize its finances, potentially leading to further downgrades.

 

Elevated governance risks were also highlighted, noting that county leaders were slow to adjust after the decline in federal pandemic stimulus funding.

 

Additionally, restrictions related to tax caps may necessitate legal or voter approval to increase revenue.

 

The county's aging and declining population was identified as an additional social risk.

 

The negative outlook indicates a one-in-three chance of another downgrade within a year if the county cannot balance its budget without further borrowing or if proposed tax increases do not pass.

 

In response, the county commissioners have taken steps to address the financial challenges.

 

They have petitioned the Court of Common Pleas to approve borrowing over $8 million to cover unfunded debt resulting from the ongoing state budget delay.

 

This move aims to ensure the continuation of essential county services.

 

Commissioner Scott Hunt emphasized the loan's structure, stating, "The amount is an up-to and would be done as a draw-down loan. Therefore, we would only take out what was absolutely needed."

 

Despite these challenges, Cambria County has also seen positive developments.

 

Governor Josh Shapiro announced a $2 million grant to the Cambria County Library to expand high-speed internet access, aiming to enhance educational and career opportunities for residents.

 

Additionally, the county has received nearly $4 million in grants for various public projects, including improvements to educational facilities.

 

These investments reflect ongoing efforts to bolster the county's infrastructure and community services.

 

As Cambria County navigates these financial challenges, the commitment to fiscal responsibility and strategic investments remains crucial to restoring financial stability and supporting the community's needs.