Long Beach Has Better Credit Than You (No Debt Crisis Here)

Debt Crisis?  Not in the City of Long Beach.  While the Federal Government may have just gotten a credit downgrade by Standard & Poors, one of their competitors, Moody’s has just raised The City of Long Beach’s credit rating to A1 from an A3 assigned in 2008.

Both of these ratings fall along the same part of the spectrum, meaning that Moody’s – and lending institutions – look at the City of Long Beach as being of the “upper-medium grade” debtors who are  subject to “low credit risk.”

This is a good thing, and though there are many taxes and fees that have residents pulling their hair out, the City does stand financially sound compared to much of the rest of the state – and is a rarity among the budget disasters that make up most of Nassau County

The City of Long Beach has a “below average debt burden,” and a sizable and stable residential  tax base of $5.5 billion.

Some interesting highlights:

  • The city has experienced assessed value growth of 0.4% annually over the past five years, reflecting modest development offset by successful tax appeals.
  • The city is expected to benefit in the medium term from the construction of several high- rise residential buildings currently in development (what are they talking about?).
  • Modest long term growth is expected given the availability of additional ocean front property.
  • The tax base is not dominated by any one large taxpayer and no major tax appeals are outstanding.
What’s interesting from my perspective, is the omission of the Quiksilver Pro in this report.  I’ve heard the City claim this event could bring in $1 billion across the city  (i.e. taxes, fees, parking tickets, business sales, real estate sales, all sorts of other increases in business).  With frankly such a low debt exposure – $56 million outstanding – a proposed spike in business like this could be a massive cash cow.
If you’re having trouble sleeping, or are really a budget wonk, you can read Moody’s report here.

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2 thoughts on “Long Beach Has Better Credit Than You (No Debt Crisis Here)”

  1. Do you think Long Beach will float some bonds? For say… A new boardwalk? The boardwalk does print money, so that could be a possibility.. Raise enough dough to rebuild the boardwalk – pay the bond off with an increased beach fee. just speculation here…

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