Real estate market stability and controlled spending are two factors supporting a stable outlook for U.S. local governments in 2017, according to a Fitch Ratings report.
Both the rating and sector outlook are stable for 2017.
"Despite the sector's stability, there are some uncertainties around revenue generation. Sales tax revenue growth has slowed, and uncertainty about the new federal administration's policies makes assessing growth prospects difficult," said Amy Laskey, managing director.
"The new federal administration may enact policy that could reduce funding to states, and in turn lower aid distributed to local governments. Significant cuts to K-12 education are not expected, but even flat funding would make budget-balancing difficult for school districts as costs continue to grow at least at inflationary rates."
