Brownsville, Texas, Wins S&P Upgrade to AA

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DALLAS — With its economy showing signs of improvement, Brownsville, Texas has earned a Standard & Poor's upgrade to AA from AA-minus, analysts said.

The upgrade, issued in advance of a $9.3 million issue of certificates of obligation, came with caveats.

"While we do not expect it to occur within the two-year outlook period, we could raise the rating if economic metrics were to improve significantly and if financial management policies were to strengthen," said Standard & Poor's credit analyst Jim Tchou. "We, however, could lower the rating if finances and the debt profile were to weaken or if our economic assessment were to weaken."

Still to be seen is how large of an impact the southernmost Texas city will suffer from slumping oil prices. As one of Texas' largest port cities, Brownsville also serves as a port for northern Mexico.

With a population of 181,860, Brownsville is part of a highly populated but largely impoverished network of cities in the Lower Rio Grande Valley. Brownsville, the seat of government for Cameron County, has one of the highest poverty rates in the nation.

The city was chosen in 2014 as the site of Space-X's new rocket launching facility and is expecting an economic boost from expansion of the University of Texas Rio Grande Valley that will include a medical school in nearby Edinburg.

Tchou noted that the unemployment rate in Brownsville has fallen below 10%.

One legislative measure that could hurt the region's economy is a bill that would deny in-state tuition to children of undocumented immigrants. UT Rio Grande Valley will have the most undocumented students of any school in the country next fall, according to the Brownsville Herald.

Gov. Greg Abbott's secretary of state Carlos Cascos was born across the Rio Grande from Brownsville in the sister city of Matamoros.  He moved with his family to Brownsville, where he became Cameron County's first Republican county judge.

Abbott has pledged to continue militarizing the border region, and the Texas Legislature has approved bills that increase funding for state border patrols and state national guard troops.

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