Dip in bond rating the latest hit to city budget - WMC Action News 5 - Memphis, Tennessee

Dip in bond rating the latest hit to city budget

The City of Memphis' budget problems lowered the city's bond rating, and that dip is going to cost you.

Last week, the Mayor's staff announced last year's budget was more than twice as bad as previously thought and that next year's budget will require massive cuts. Tuesday we may get our first glimpse at those cuts. In the meantime, the country's major bond rating agencies are making it more expensive for Memphis to do business.

Two of the three major rating agencies have downgraded the City of Memphis.

"I think we're in for some challenging times. I think the administration has had a wake up call. The council, I think, is going to be more proactive," said Councilman Jack Sammons.

A dip in the bond rating is like a hit in your credit rating. When the city goes to borrow money it now has to pay more to get more.

"Well, there has been mismanagement clearly. And yeah, of course, the taxpayers are going to pay a price. They're going to pay a price in that it does cost more to borrow money so there's less things we're able to do for the citizens with the money that we have," said Councilwoman Carol Chumney.

Council members are bracing for sweeping cuts, possibly announced as soon as this week.

The cuts will strike a double-blow. They save money, and they show the bond rating agencies that the city is actively working on its problem.

"Sometimes you got to hit a mule over his head to get his attention. And I think it's a very efficient market and the market's telling us it's broken, you better fix it and I expect that's what we'll do," said Sammons.

No one knows yet how dramatic the cuts will have to be.

Again, Tuesday we are expecting a presentation from the new finance staff at city hall about cuts to the capitol improvements budget. Action News 5 will be there.

  • News on WMCTV.comNewsMore>>

  • Tri-State Defender celebrates 65 years

    Tri-State Defender celebrates 65 years

    Saturday, March 25 2017 11:30 PM EDT2017-03-26 03:30:41 GMT
    (Source: WMC Action News 5)(Source: WMC Action News 5)

    A longtime newspaper in the Mid-South is celebrating a big milestone. The Tri-State Defender celebrated its 65th anniversary with a Leaders and Legends gala on Saturday night. 

    More >>

    A longtime newspaper in the Mid-South is celebrating a big milestone. The Tri-State Defender celebrated its 65th anniversary with a Leaders and Legends gala on Saturday night. 

    More >>
  • breaking

    MPD investigates double homicide on W. Peebles Rd.

    MPD investigates double homicide on W. Peebles Rd.

    Saturday, March 25 2017 11:24 PM EDT2017-03-26 03:24:13 GMT
    (Source: WMC Action News 5)(Source: WMC Action News 5)

    Memphis Police Department is investigating a possible double homicide on West Peebles Road.  

    More >>

    Memphis Police Department is investigating a double homicide on West Peebles Road.  A major with the MPD confirmed that two people are dead after a shooting.  We're hearing from multiple family members that a brother of one of the victims, a 62-year-old man, said the two men got into an argument. One opened fire, hitting the first victim. He then went out to his car, came back to the home and shot the other man, killing him. We have a crew on the scene and updat...

    More >>
  • MPD searching for Walmart armed robbery suspect

    MPD searching for Walmart armed robbery suspect

    Saturday, March 25 2017 9:57 PM EDT2017-03-26 01:57:29 GMT
    (Source: MPD)(Source: MPD)

    Memphis Police Department needs your help identifying a robbery suspect. On March 25 at approximately 11:30 a.m., Memphis Police responded to a robbery at Wal-Mart located at 6727 Raleigh LaGrange Road. 

    More >>

    Memphis Police Department needs your help identifying a robbery suspect. On March 25 at approximately 11:30 a.m., Memphis Police responded to a robbery at Wal-Mart located at 6727 Raleigh LaGrange Road. 

    More >>
Powered by Frankly