Federal tax law to squeeze local governments in tri-state region

Source: Valentina Gomez, Nicholas Samuels, Leonard Jones, Moody’s, Sector In-Depth, April 11, 2018
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The recent federal tax legislation will have an adverse credit effect on local governments in the tri-state region of Connecticut (A1 stable), New York (Aa1 stable) and New Jersey (A3 stable). This is due to the region’s relatively high state and local taxes and unusually high home prices, particularly in the New York City metropolitan area. The impact, however, will vary from state to state depending on tax levy formulas, fixed cost burdens and state actions to blunt the effect of the federal changes