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For Luzerne County Manager Robert Lawton, the news came as sweet and deserved vindication.
Credit-rating agency Standard & Poor’s took a close look at Luzerne County’s financial situation and recently deemed the county worthy of a BBB rating – bestowing this long-bruised county the first credit rating of its own in more than two decades. For residents and taxpayers, this means the storm clouds finally could be lifting.
Don’t hoist your Champagne flute and break into a chorus of “Happy days are here again” just yet. After all, the county must continue to cover its bills while repaying $395 million in debt – a monstrous burden that was incurred before Luzerne County’s home rule government was installed about three years ago.
But the unexpected rating gives the county new maneuverability to cope with its debt, and it supplies advocates of home rule with some much-needed assurance that they’re on the right path.
Lawton announced the milestone Tuesday in the courthouse rotunda, using part of his speech to credit county council. Readers of this newspaper learned details about the Standard & Poor’s action on April Fools’ Day, but this was no joke. A triple-B rating, while on the low end of a scale that peaks at AAA, suggests to potential investors that the county has an adequate capacity to meet its financial commitments, such as repay money it is loaned.
Linda McClosky Houck, who chairs the 11-person county council, offered this assessment: “In spite of all the criticism of what we’ve been doing and of home rule, within three years we’ve turned it around.”
Getting to this point, of course, has been painful. Council approved property tax increases in 2012 and 2014. It then authorized a suspension of a tax break on people’s primary residences, known as the homestead exemption, to begin this year. Certain county employees lost their jobs, while others shouldered a heavier work load. In some cases, government services suffered.
Backed by its investment-grade credit rating, however, the county government can now – and in years ahead – apply to refinance some of its debt packages at lower interest rates. Under the current repayment setup, taxpayers shell out a whopping $28 million every year just to pay down past borrowing.
Luzerne County has learned its lesson the hard way.
Let’s vow not to repeat past mistakes, acknowledge progress as it’s made, recognize those who do the difficult work and continue the county’s rise.