Moody’s credit-rating agency on Friday qualified as “credit negative” Miami-Dade County’s decision last week to eliminate a healthcare contribution and restore workers’ pay.
The notice was the latest warning from Moody’s that it could soon downgrade Miami-Dade’s credit rating, which would make it more expensive for the county to borrow money.
“We’re under pressure,” said Ed Marquez, deputy mayor for finance, adding that he warned commissioners of the consequences of their decision. “They could downgrade us at any time.”
Eliminating the pay concession, which required most workers to contribute 5 percent of their base pay toward group healthcare costs, will require the county to cut $42 million this year from its $4.4 billion budget. That’s on top of a $24 million deficit created by a shortfall in property-tax collections, with little political will to raise the tax-rate for next year, Moody’s report notes.
Miami-Dade still has a credit rating considered a low risk for lenders. But in November, Moody’s gave the county a negative credit outlook, citing a squeeze on Miami-Dade’s emergency reserves.
Marquez said at the time that downgrading the county’s credit rating by one notch could cost $111 million over the next 20 to 30 years in higher interest rates on bonds.