Reuters: Regulatory News: Sales-tax defeat a credit drag for Atlanta - Moody's

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Sales-tax defeat a credit drag for Atlanta - Moody's Aug 6th 2012, 15:30 Mon Aug 6, 2012 11:30am EDT Aug 6 (Reuters) - Voters in Atlanta created a credit negative for the metropolis last week by solidly rejecting a proposed 1 percent sales tax that would have financed billions of dollars of transportation infrastructure, Moody's Investors Service said on M ond ay. Along with voters in eight other regions of Georgia, voters in Atlanta's 10-county region knocked down a referendum that would have authorized a 1 percent transportation special purpose local options sales tax. Three Georgia regions okayed the sales tax, which state officials had forecast would have paid for as much as $16.9 billion worth of infrastructure projects across the state. Atlanta's tax increase would have produced $7.2 billion for transport improvements, such as an expansion of the Metropolitan Atlanta Rapid Transit Authority (MARTA) system. "For regions that defeated the tax, particularly metropolitan Atlanta, the failure is credit negative as the lack of funds to upgrade and expand infrastructure will likely hinder economic development," Moody's said in a commentary. In Atlanta, where 63 percent of voters opposed the measure, the tax was especially important "because of the city's position as a major economic center in the Southeast, which could be hurt by the area's less-than-satisfactory infrastructure," Moody's said. It said the winning votes in three regions - Central Savannah River, the River Valley District and the Heart of Georgia District - were credit positives for those areas. Link this Share this Digg this Email Reprints

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