With more than 100 Mississippi bridges closed recently due to potential safety risks, Moody's Investors Service said deteriorating infrastructure is a credit negative for the state and counties responsible for maintenance.
“We expect that the two levels of government will need to make immediate and long-term improvements in collaboration with one another and share some of the financial burden,” Moody's analyst Joseph Manoleas said Thursday.
Gov. Phil Bryant declared a state of emergency April 10, ordering the immediate closing of 83 locally owned bridges because they were deemed deficient by the federal National Bridge Inspection Standards and the Mississippi Office of State Aid Road Construction.
Keeping unsafe bridges opened, he said, would jeopardize federal funding received by the state.
At the time of Bryant’s announcement, 16 counties were affected. The number of closures has since risen to 102.
A Mississippi Department of Transportation map shows 125 bridges strewn across the state that are closed or posted with weight restrictions.
Bryant said his emergency declaration would apply to bridges that are found to be deficient in the future.
“These bridges have been deemed unsafe for the traveling public,” he said. “Keeping them open constitutes an unnecessary risk to public safety, violates the corrective action plan agreed upon by the state and federal government, and jeopardizes federal infrastructure funds Mississippi receives.”
Moody’s has rated Mississippi’s general obligation bonds Aa2 with a negative outlook since August 2016. While rating the issuance of $98 million of GOs Aa2 in November, Moody’s maintained the negative outlook citing the state’s stagnant revenue and economic trends as well as rising pension burden and high debt levels.
Bryant’s bridge closing order came after the U.S. Department of Transportation notified the state that numerous bridges did not comply with national bridge inspection standards, and that failure to close structures could result in reduced federal aid for MDOT, Moody’s said.
According to the USDOT, 2,008 or 12% of the state’s 17,012 bridges are structurally deficient.
“This share is higher than the nationwide state median of 9% of all bridges,” Manoleas said. “The state combines an above-average rate of structural bridge deficiency with low wealth indicators, which pose challenges to funding maintenance of the state’s infrastructure.
The total number of locally owned and managed closed bridges is 644 statewide, Moody’s said.
“Counties also have a strong ability to raise local property taxes by up to 10% annually for operations,” Manoleas said. “Nonetheless, the financial and operational responsibility for the bridge repairs falls on the counties, which will challenge local resources.”
The state also has struggled to address its infrastructure needs, he said.
In the recently completed legislative session, state lawmakers were unable to agree on a comprehensive infrastructure spending bill. Lawmakers did authorize $50 million in bonds for infrastructure needs for fiscal 2019, $30 million more than the usual authorization, according to Moody’s.
The state estimates an additional $40 million to $50 million will be needed for local bridge repairs, in addition to approximately $400 million in additional recurring revenue each year for state infrastructure, road and bridge repairs.
The governor is considering calling a special session of the Legislature to develop an infrastructure plan, although significant disagreement exists over funding sources and amount, Manoleas said. “The challenge is compounded by political resistance to new taxes and already high state debt.”
In 2017, Mississippi had the fifth-highest debt burden at 5.1% of gross domestic product, versus the 50-U.S.-state median of 2.1%.