Moody’s awards metro Atlanta a ‘credit negative’ for TSPLOST failure

The note that arrived from Moody’s is pretty self-explanatory. The defeat of the transportation sales tax vote in metro Atlanta and eight other regions of the state won’t result in an immediate downgrading of credit – but could result in one when the state or local governments go bond-shopping in the future.

Moody’s was especially tough on metro Atlanta. Here’s the notice the rating firm sent:

In our Credit Outlook released today, Moody’s announced that voter rejection of a 1% Special Purpose Local Option Sales Tax (T-SPLOST) in nine of 12 regions of the State of Georgia is a credit negative for those areas…, especially for Atlanta because of the city’s position as an economic hub, which could be hurt by the area’s current condition of infrastructure.

The Atlanta region needs major upgrades to its dated and limited transit system and congested roadways to maintain its long-term position as an influential economic center. The region will now be challenged to fund such projects on a local or state level, as the region had not formulated a specific contingency plan for identified projects if voters rejected the tax.

Conversely, voter approval and adoption of T-SPLOST is a credit positive for the three regions that approved it. These regions will benefit during and after the new sales tax’s 10-year collection period as the proceeds will fund a combined 121 transportation-related projects. These regions are the Central Savannah River, the River Valley District, and The Heart of Georgia District.

Moody’s declaration of “credit positive” or “credit negative” does not connote a ratings change. We are simply stating what the credit impact could be on issuers as a result of this new legislation.

- By Jim Galloway, Political Insider

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79 comments Add your comment

One Who Knows....

August 6th, 2012
6:01 pm

“credit positive” just means there is more tax money to be collected and spent for the whims of politicians….

If you don’t take on more bond debt then you don’t have to worry about Moodys ratings.

If the politicians were serious about raising money for transportation projects then they would raise the gas tax. When the Gov issued his executive order lowering the gas tax, we knew the T-SPLOST was a farce.

Chuck

August 6th, 2012
6:12 pm

Would not be an issue if they would’ve listened to residents. Instead, they attempted to force feed us poor solutions for the issues. Everyone agrees congestion is a problem but certainly not a reason to cut a blank check!!!

hiram

August 6th, 2012
6:14 pm

Not to worry, Gerogia’s ratings will go through the roof when we get the casinos, horse racing,
and brothels underway…

30 yr resident

August 6th, 2012
6:21 pm

what about sewer, water, and infrastructure in the Atlanta region ? was there any money for that in T-SPLOST ? 157 different “projects” ? what were they ?. what a sorry way to try and cram another tax on people, using tax money to do it. won’t they ever learn ? we all know the answer . we, the people, don’t have any more money for ANYTHING in this economy.

Road Scholar

August 6th, 2012
6:22 pm

One who knows…: How do the hybrids and electric cars owners pay their fair share? Do ya know?

Mama Says

August 6th, 2012
6:33 pm

Why is this so hard to get ?

In every argument we see from proponents we eventually hear that it will bring more businesses and people to the area.

The politicians can’t get this done because they are not focused on the issue. Transportation is the issue not more business.

When I hear a politician telling me how much business is gonna like the plan I hear a politician telling me that we are focused on revenue not transportation.

When your plan physically focuses 80% of the improvements in roadway widening or new roads you are telling me that you have no ability to think outside the box nor actually bring a new plan to the table. We have been expanding roads for 70 years, it does not work.

Joe

August 6th, 2012
6:52 pm

I feel so blessed to live in a city where the people that post on ajc.com always know better than the successful companies that employ you. Most of you speak from pinnacles of near perfect ignorance.

Melaine

August 6th, 2012
6:54 pm

Did Moody’s even read the list? How are projects like redecorating MARTA stations, the Beltline, lighting and a new tower for McCollum among other “I got something for my little pond to brag about” projects going to help the transit and congestion in Atlanta. The ARC admitted that the billions of dollars would only reduce commute time by a fraction (6%, if I remember correctly) and would asking for billions more each ten years to finish projects. The lack of a “specific contingency plan” was touted as a reason to vote for this plan because the threat was we would not get another. This was a government boondoggle was a waste of money and time put together by politicians with their bit of real estate to protect not engineers that could actually have made an intelligent case for the projects and the costs they would have proposed.

HENRY

August 6th, 2012
7:07 pm

real casinos, not this video crap, will pull the atlanta area out of the fire. i really don’t care what the credit score is. mine is ok.

Kasim

August 6th, 2012
7:12 pm

Don’t worry! ECB, LTRO, or The Fed will bail us out. Spendspendspend!

Scott Anderson

August 6th, 2012
7:15 pm

I would support the casinos. I would just play with money I could afford to lose. I would eat there and see some shows.

Georgia is one of the most backwords states in the country. We just now are allowed to buy a beer on Sunday after 50 years. Who cares if someone wants a beer on Sundasy. It just shows how pathetic some people think about things.

Horseracing is not my thing, but I would go and watch them . I would eat there and spend some money.

At least the video slots would be a start.

Lets get out of the stone ages Georgia.

Kris

August 6th, 2012
7:16 pm

@ hiram………Well said! And the Presidents of the GA colleges can raise tuition, SILLY fees and give themselves raises….Yep gambling s gonna fix all that…

Wonder if this will make it harder for people to get one of those Graves/Rogers loans, You know the kind you don’t have to pay back?

Moody's is a wake up call

August 6th, 2012
7:20 pm

While the T-SPLOST list was not perfect, it was a major start. Unlike most people who voted No, Moody’s is looking at the big picture. My frustration is that so many business leaders and legislators did not see the hypocrisy of asking citizens to vote for a tax increase while the Republucan legislature keeps giving business interests tax breaks at the expense it the Middle Class. I held my nose and voted Yes. Thanks to Tea Party, NAACP, and Sierra Club, Atlanta is now on the downward slope. The three idiot musketeers:,Dooley, Evans, and Fort can pat themselves on the back for years to come while we watch Dallas, Charlotte, Raleigh-Durham and more pass Atlanta in the fast lane, taking thousands of jobs with them. Now the Governor refuses to take bold leadership! Essig is right, we need increased revenues. Time to get out of Atlanta area and watch its demise from s distance rather than be a part of the painful self-destruction.

ramblin' gamblin' engineer

August 6th, 2012
7:35 pm

I agree with every part of the above comment except for the last sentence. Great going, Atlanta.

Jen

August 6th, 2012
7:40 pm

This vote failed on misinformation, lies and stupidity. Congrats. 80% road projects=WRONG. Blank check=wrong. The real mistake by politicians was asking voters to make an informed decision. Should have stuck with the golden rule of just raising property tax and spend it how they wanted, eh? Idiots.

Big t

August 6th, 2012
7:42 pm

How many jobs come to the City of ATLANTA, that are not Goverment jobs.
Does anyone think the School Sys has anything to do with people not wanting there kids in GA. School SYS

Rocket1300

August 6th, 2012
7:42 pm

The T-SPOLST was a wreck. Let em fix it and they will. Glad we didn’t take it like we do other taxes. Glad cooler heads prevailed. Those who can’t stomach the fact that they were wrong can move. Delta is ready when you are.

ed

August 6th, 2012
7:44 pm

This is one of two credit rating agencies that gave stamps of approval on sub-prime loans. Moodys and Stanrard and Poor are laughable. Who seriously cares what they do?

Thomas

August 6th, 2012
7:50 pm

Toll projects are looking like a new source of revenue when all else fails.

Loki

August 6th, 2012
7:53 pm

Moody,

The housing crash was the final nail in this town’s coffin. Atlanta has been dead for a while, y’all just don’t know it.

Future of Atlanta

August 6th, 2012
7:55 pm

I couldn’t wait to graduate college because I grew up in Gwinnett had and always wanted to work downtown. Now that T-SPLOST has failed, I am very doubtful that I will pursue many jobs there. T-SPLOST is just one instance of how aging, upper-middle class, selfish ass Tea Party wannabes have put a strangle hold on development in the city. Instead of thinking of the future tax-payers, aka my generation who don’t like driving and heavily support the idea of public transportation, they decided that they don’t want to pay a 1% sales tax because they’ll be retired by the time the people who want to utilize the services T-SPLOST would have created are using them. Metro Atlanta absolutely dropped the ball on this vote. Maybe a win for Conservativism, but a major loss for the city and its future.

Bernie Madoff

August 6th, 2012
8:00 pm

Let me get this right: the company that gave its highest ratings to derivaties, credit default swaps and mortgage back securities is now lecturing us on the wisdom of defeating T-splost?

Rating agencies are a corrupt joke. They profit from ratings and are in bed with the companies they rate. Why the government continues to allow the conflict of interest I don’t know.

My answer? F.ck Moodys!

Wondering

August 6th, 2012
8:02 pm

Moodys rates bonds when they are paid by the bond issuer. This is the only country where that occurs, and remember that these are the people that led us down the yellow brick road to disaster with their AAA rating of credit default swaps. If I needed a confirmation that defeating the T-SPLOST proect list was the right thing to do, I just got it.

Where was Moodys’ evaluation of the T-SPLOST project list? Do they really think we should have voted for the Belt Line? When we need real roads and transit improvements, we are supposed to pour millions into a project whose very name says it takes you in a circle to nowhere?

trailboss

August 6th, 2012
8:18 pm

Man there’s a lot of people who spent millions in advance to pass this law…now why would you put all this money to push for a yes vote,now don’t that make you think why are you putting so much into this and we have to put it to a vote. If this guy love this State so much he should be able to to get things started until his buddy’s come with away to get his money back.NEW FLASH any idea you have if transportation is in it don’t forget 400.We was thinking our education problems will be over if we get the lottery and that we have the lottery and I haven’t seen so many teacher’s laid off since we voted the lottery,schools closing everywhere went for it and don’t tell me now we have the casino’s coming next and it is going to take care of the education for sure.I think you are going to see we got it .

Lanny Bridgers

August 6th, 2012
8:21 pm

If you had to choose among casinos, same sex marriage, abortion limitations or transporation improvements, which would choose?

Question Man

August 6th, 2012
8:45 pm

How long before the proponents of the T-Splost, including Mayor Reed, say “Nevermind. We were incorrect when we said transportation in Atlanta is the pits?”

scooby

August 6th, 2012
8:45 pm

“Rating agencies are a corrupt joke. They profit from ratings and are in bed with the companies they rate. Why the government continues to allow the conflict of interest I don’t know.”

Thank you Bernie.

They’re all in bed together, even the govment. They’re also akin to the mob, using another one of its limbs to strong arm us. That crap ain’t gonna work. Flip Moody’s!

josh

August 6th, 2012
8:47 pm

want new transportation projects? then make room in your already existing budget for those projects by cutting in other places. when i want to take a vacation, i don’t spend all my money, go on the trip, and then come home and ask my boss for more money. i make personal cuts and sacrifices here and there over time in order to make room (also called SAVING) for the vacation expenses….it’s called living on a budget. it’s how normal people live. why can’t the government understand this?

Mr. Wrestling Number Four

August 6th, 2012
8:48 pm

Only 48% was for roads (not 80%). Reduce travel times by estimated 24% (not 6%). Identified list of 157 transportation projects (not a blank check). COA residents already pay an extra 1% for water/sewer improvements…Lots of misinformation out there.

UGA ECONOMICS MAJOR

August 6th, 2012
8:50 pm

the downfall of Atlanta metro continues…DUE TO DEEP RACIAL DIVIDE,AND BACKWATER THINKING…CHARLOTTE/LOOKING GOOD AS THE NEW CAPITAL OF THE SOUTH

Bojack

August 6th, 2012
8:55 pm

Mr Gwinnett @ 7;55, “Always wanted to work downtown” not much ambition there son. What kind of Education did you get at college? Get a life son downtown is not where its at.
Rocket 1300 is right. Who can trust their politicians to spend their money? Do you really believe it would have gone for transportation..give be a break.

JRS

August 6th, 2012
9:00 pm

Hey Tea Partiers, your chickens are coming home to roost. Enjoy the ever-lengthening commutes from your Cobb County McMansions.

JBT

August 6th, 2012
9:06 pm

JRS who you talking to. Where’s the tea party.

Monroe Burbank

August 6th, 2012
9:07 pm

Georgians have been cutting off their nose to spite their face since the Civil War.

JBT

August 6th, 2012
9:08 pm

AC

August 6th, 2012
9:11 pm

my response to anything and everything that comes from moody’s: no. one. cares. all they want is to make a political statement and they are consistently always days late at it.

Traveling Man

August 6th, 2012
9:14 pm

As a guy who travels the ENTIRE country consulting various Federal, State, County and City Transportation Agencies, I have seen every type of tax and scheme to raise funding. Guys like “Road Scholar” will tell you the GDOT has made “major cuts’ in personnel and work force. What he will not tell you is that prior to the Olympics in 94-96 the GDOT hired and rehired retirees to work and many of those stayed on in jobs that were no longer needed. The GDOT has lost approximately 54% of its budget since the 96 fiscal year, YET have only cut 19.6% of their work force during that time. Every year the GDOT holds onto to jobs that do not creat ANYTHING the longer the residents draw negative responses in their opinions of the way their money is spent.

Next topic. It is a fact that light rail is a money pit anywhere except the northeast. The demand is not there to support any type of light rail including Marta..etc without the ridership. Other cities got smart and offered direct cable cars, quick line direct buses and trolleys that run miles without delay. It may or may not work in Atlanta, but it is not the money pit that MARTA has become.

Roads need to be expanded, Truck routes need to more direct and moving those Trucks out of contact with ATLANTA commuter traffic is where EVERY project should start, direct routes from Augusta to Columbus, Savannah to Chattanooga, and create a road where those trucks travel around Atlanta if they are not logistically connected to Atlanta or Metro Atlanta. Currently 4 out o10 18 wheel trucks on I-285, I-75, I-20, I-85 have no direct business with Metro, they are long haul indirect vehicles whose gross weights are damaging our roads, and with the current lack of Weight Enforcment and operation hours allow trucks to freely travel throughout Georgia avoiding scales and enforcement.

BoyWonder

August 6th, 2012
9:14 pm

Oh yeah…
Moody’s
The same geniuses that brought us AAA rated junk CDO’s..
All the while their analysts were getting big bonuses to rate the crap as gold.

Yeah – you will excuse me if I don’t go jump out of a window on their word..
As if they have ANY integrity any longer

Pete

August 6th, 2012
9:19 pm

Unfortunately, we have too many ignorant folks in this state who couldn’t care less about economic development and job creation if it means spending a penny.

ze

August 6th, 2012
9:19 pm

Credit negative = piles of red necks

RGB

August 6th, 2012
9:37 pm

Atlanta’s unemployment rate is higher than the national average and Moody’s (and other Democrat forces) assert that we should tax ourselves into prosperity. Fortunately, even people in Fulton County realized the stupidity of the proposition.

Boy Wonder is correct: Moody’s has a dismal track record at assessing risk.

JRS: In addition to housing envy, do you possess any other undesirable human characteristics? Any good ones?

And Pete, the T-SPLOST proponents stated the reason for the tax measure was (a) to reduce congestion. Now you are asserting that its purpose was (b) economic development.

Which was it?

ANSWER: (c) None of the above.

BrakePad

August 6th, 2012
9:45 pm

RE: Traveling Man: “The GDOT has lost approximately 54% of its budget since the 96 fiscal year, YET have only cut 19.6% of their work force…”

I don’t know how Traveling Man travels with one foot in his mouth. Even if the figures are true, it’s a grim day for GDOT and for the state.

To compare 94-96 numbers (the date GDOT fired Traveling Man)with today’s is so far out. Give me and the 4400 GDOT employeea break.

Chris

August 6th, 2012
9:48 pm

Lets see, Moody’s, aren’t these the same clowns that rated toxic subprime mortgages “AAA” safe back in 2005-2007?

Nice try Jim. And BTW, how’s the morale over there at Cox with $100K of lobbying money that could have been spent on bonuses flushed away?

scooby

August 6th, 2012
9:51 pm

Traveling Man: MARTA would be a complete system if it were supported and ran throughout the entire Metro. It is not a money pit as you assumed but a system that’s boxed in and hand tied by the state and others in the region who have a say but does not contribute. Other citie’s stakeholders have input and $$$$ invested in their region’s transit systems.

Roads is seemingly more of a money pit in this region in that, it dominates yet we’re still in a pickle relative to traffic………….

Ihad

August 6th, 2012
9:51 pm

You had your chance . Now go ahead and rationalize while you voted to send Atlanta back 20 years. Go ahead and sit in your cars and watch the traffic crawl for miles for your hour ride home. And when you finally get home, go for a walk on the busted up sidewalks.Oh wait you don’t belive in sidewalks in front of your house… Thank you for voting no!

bcatl

August 6th, 2012
10:18 pm

@Traveling Man

You must not travel very often unlike what you state. Charlotte’s light rail=current ridership they werent expecting to reach until 2025. Other cities with successful light rail projects (and extensive ones at that) include Portland, San Diego, Salt Lake City, Denver, Minneapolis, and Pittsburgh. Pittsburgh is the only one that could be considered northeast. Your statement is wrong as light rail is not very popular in the northeast aside from Newark and a few lines in Boston. They depend on heavy rail.

Give statistics that prove MARTA is a money pit. It has been rated financially more secure than most transit agencies in this country and that is without state support like most get. Use facts, not baseless opinion. You cant do direct line buses when the roads are clogged up. Nor can you do trolleys or streetcars when the roads are clogged up. So neither of those would work until the main issue is addressed and options are created. If you advise transit agencies, you wont have a job much longer.

How many more roads can possibly be built before we pave over the entire region? With several interstates all with extreme capacity, there is only so much that can be built. The more you build the more traffic builds up. It is called induced traffic and has been proven since the 60’s. Yet we continue to ignore the scientific and studied evidence and think that if we make more lanes or more diverging diamonds we will pave our way out of it. It has never worked in any city in this country. We will not be the first to do it.

Marta is Unsafe

August 6th, 2012
10:28 pm

Marta has become a vehicle for criminals to steal. I and others I know have been robbed point blank on the Marta trains. Until this is corrected, Marta will never get the critical mass of riders required from the northern suburbs to make their business work. It doesn’t help that security is one of the first things Marta cuts when facing budget issues.

Take MARTA it's smarter

August 6th, 2012
10:38 pm

I was so happy today as I watched people parked on I-85 heading into Gwinnett, while gliding on MARTA up to Chamblee Station. I’m good…. YOU?

OedipusTax

August 6th, 2012
11:02 pm

How many actual folks that are politicians, lawyers or members of the Atlanta Chamber of Commerce actually ride MARTA? No, these are the people HOT lanes are made for, so they can ride for free in the HOT lanes charging the taxpayer for the ride in their BMW or LEXUS. It is the unwashed myrmidons that are supposed to get out of their way of the incredibly smart egotistical politicians. After all, politicians and bureacrats know what’s good for everyone, and always, always, always demand more money for promises they have no intention of keeping. For now, we’ll have to put up with their sickening belly aching and whining. Anybody that travels knows the traffic in Boston or LA makes Atlanta traffic look not all that bad, and their infrastructure versus ours make ours look clean and brand new.

Mike

August 6th, 2012
11:27 pm

I have to call hogwash on you too Traveling Man. I’ve followed the transportation industry for years and some of what you are saying makes no sense. What is a “direct cable car” or a “quick line direct bus”? The only cable cars in this country (besides at a few airports and hotels in Vegas – and those are people movers) are in San Francisco. They aren’t new and they run in traffic. Bcatl correctly pointed out several cities with thriving light rail projects. Add Dallas to that list and they are expanding the system in Phoenix as well. The Hudson Bergen Light Rail in NJ has also been a well documented success. And new roads? Like Atlanta needs more traffic and pollution. Transportation consultant huh…sounds like you “consult” on behalf of the road-building industry.