The specter of another top taxpayer leaving Woonsocket, R.I., could be a credit negative for the city, said Moody's Investors Service.

WP Woonsocket Associates LLC of Bryn Mawr, Pa., the fourth-largest taxpayer in the city and the owner of Woonsocket Plaza, could follow big-box retailers Wal-Mart Stores Inc. and Lowe's Co. out of town because of high property taxes. According to the Woonsocket Call, WP Woonsocket has asked the city for a major tax break because it cannot afford to renew its lease with Burlington Coat Factory.

"Losing another large taxpayer would be credit negative to the city because it would reduce revenues and it signals growing resistance to property tax hikes," said Moody's, which rates the city a junk-level B3 with a negative outlook.

Woonsocket is under the purview of a budget commission, the second of three levels of state intervention for distressed municipalities.

Moody's referenced an analysis of property taxation in Rhode Island conducted by the state's Division of Municipal Finance and the Rhode Island League of Cities and Towns, which said that Woonsocket's residential and commercial real estate taxes are the highest relative to similar communities statewide. Moody's called it "the result of six years of annual levy increases averaging 6.1%."

Woonsocket, a 41,000-population city 15 miles north of capital Providence and home to CVS Caremark Corp., has a large accumulated deficit and recurring liquidity challenges due to many years of school-fund deficits, according to Moody's. The city also carries high debt, including $90 million of pension obligation bonds and $11.5 million of deficit bonds.

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