DALLAS — With a property tax rollback election scheduled for April 8, Bowie County, Texas, took a two-notch downgrade from Moody's Investors Service to A3 from A1 and remains on review for a further downgrade.
The Feb. 26 downgrade on the northeast Texas county's general obligation bonds affects $34.9 million in outstanding debt, according to Moody's. The county has $1.3 million in additional debt that is not rated by Moody's.
The downgrade "reflects the county's severely strained financial position challenged by volatile jail operations and projected negative fund balance for fiscal year 2013," according to Moody's analysts Sarah Jensen and Kristin Button. "The rating also considers the county's sizeable and steadily growing tax base, average socioeconomic profile, and slow debt payout."
The rollback election is the result of a petition drive that collected 6,200 signatures in the county of 92,565 people.
A citizens group calling itself the Bowie County Committee For Lower Taxes, claimed that the tax rate approved by county commissioners exceeded the 8% rollback rate ceiling allowed by the state for the operational expenses of the county. Under Texas law, when the rate ceiling is exceeded the taxpayers have a right to petition for a rollback election.
The county's bonds are payable from the proceeds of an ad valorem tax levied on all taxable property in the county and from payments of pass-through tolls to be received under an agreement executed with the Texas Department of Transportation.
The rollback election "could result in an additional liability for fiscal year 2014 that is not currently captured in the county's budget," the analysts said.
The Bowie County seat is Boston, though the courthouse is in New Boston. The county is considered part of the Texarkana metro area.
