Moody's Sees Florida as Credit Risk if Oil Spill Impacts Worsen
Moody's Investor Service warns that the Gulf oil leak "impact could simulate a double dip to the economy in [Florida, which is] already struggling more than most to emerge from one of the country's worst recessions." As reported in the St. Petersburg Times, Moody's points out that Florida's 1,900+ miles of coastline make the state's economy highly tourism dependent. The result of worsening spill impacts could be lowered tax revenues for local government. What happens if Moody's downgrades Florida's bond ratings because of the oil leak and resulting loss of revenue? It may raise borrowing costs for state and local governments. Not good.