Economic Crisis-It's All About Me

Scary news in the Globe this morning with its huge "An avalanche of worry" headline. It was enough to alter my normal reading pattern-glance at the headlines, move on to the opinion pages and then settle down with the sports page and comics.

When I say the crisis is all about me, I don't mean learning that at least some folks believe IRAs won't bounce back by 2018 the year when I have to start drawing on mine. I always expected to work until I'm 80. I see the liquor business is going strong so my dream of helping a downtrodden minority can still come true. Yes, I could get a job in liquor sales and sell to miners. I don't understand why our Selectmen make such a fuss about selling booze to guys who wear flashlights on their hats.

No, I'm talking about my position as a member of the Community Preservation Act Committee. The article that is causing my concern is "Rating agency downbeat on Mass. communities." For those of you who read the Herald, you can find the article here. The gist of the article is that Moody's Investment Services is putting several wealthy Massachusetts communities with their version of a triple A rating on a watch list. The watch list means Moody's might at some future date downgrade the ratings because all Massachusetts towns are so dependent on federal spending in the state. As you may know, the deficit package passed by Congress would disproportionally curtail money coming into the Massachusetts economy due to cuts in defense and education spending. Easton is not one of the towns on the watch list, but if you get to page 2 of the story you'll find these paragraphs:
              In Easton, for instance, where the town plans to sell bonds this week, officials
              feared that Moody's may lower the town's AA3 rating, which has held steady
              for several years.

              "What it would say to the investor is that our debt is riskier today than yesterday,"
               said David Colton, town administrator. "It's very frustrating because most of
               these events are beyond our control."

               Colton said that the town landed an interest rate of well under 2 percent in the
               spring and that higher rates would throw off projections. Most existing debt,
               local officials said, is locked in at existing rates and would be unaffected by
               a downgrade.

As Town Meeting attendees know, the CPA was established to purchase key pieces of open space, but over the years the town has found a number of important and valuable projects to fund including the Shovel Shop redevelopment, and purchasing land on Chestnut Street for sports fields. The Committee has taken a conservative approach to financing projects, and has used bonding to fund projects while retaining enough cash to meet the original goal of purchasing the key properties should they come on the market. Despite leveraging our purchasing power through bonding, the Committee has used a conservative fiscal analysis to ensure that only CPA funds would be needed to pay off the bonds. It's been quite a juggling act as proposed projects have increased each year while CPA revenue has decreased. Without bonding the CPA would not have achieved as much as it has, and increased costs for borrowing coupled with decreasing revenue threaten the Committee's ability to do projects in the coming year. I recently walked one of the key properties and believe it would solve our needs for parks, playing fields, and even school expansion into the next century, but we may be at the point where we have to give up holding back funds hoping  these properties will come on the market in order to fund more current needs. It should be an interesting year.