VIA KPCC’s Vanessa Romo:
Critics have accused Brown and Munger of using scare tactics about the imminent collapse of the public education system to elicit more “Yes” votes for the tax initiatives intended to shore up funds for education.
But Moody’s Investors Service says the forecast for California school districts is dire, and many are at risk of having their credit rating downgraded if both ballot measures fail.
The projections in the report, “California School Districts Face Mounting Credit Pressure If Tax Initiative Fails in November Election,” are bleak:
“As many as 150 of the 327 California school districts it rates to face some degree of fiscal pressure if both propositions are defeated. The weakest of these are likely candidates that Moody’s would place on review for downgrade following the election.”
A downgraded credit rating would lead to higher interest rates on loans. That, according to Moody’s, would be much more costly for taxpayers, as more school districts have turned to borrowing as a result of budget cuts.