Another downgrade hit Rhode Island as Moody's Investors Service lowered its rating to A2 from A1 on the Rhode Island Economic Development Corp.'s motor fuel-tax revenue bonds, affecting $77 million of outstanding debt.

Moody's also changed its outlook to negative.

This is the second downgrade for the bonds. In May, Fitch Ratings dropped them to A from A-plus.

The motor fuel-tax bonds are secured by a statutory pledge of 2 cents of the state's motor vehicle fuel tax, subject to annual appropriation.

Moody's on Monday also assigned a Aa2 rating to the state's general obligation bonds, while retaining a negative outlook. It assigned the rating to $145 million of 2011 Series A consolidated capital development loan bonds and $24.2 million of Series B bonds. The two-day retail period began on Monday, with the institutional sale scheduled for Wednesday.

The state has $1.1 billion of outstanding GO debt.

While Moody's cited the state's history of motor fuel-tax collections as a credit strength, it identified a multi-year decline in fuel tax receipts and smallness as a state as challenges.

Central Falls, a city with a population of about 19,000 and $80 million of unfunded pension debt, filed for Chapter 9 protection on Aug. 1.

Since then, East Providence, West Warwick, and a conduit issuer, the Rhode Island Health and Educational Building Corp., have also received downgrades.

Central Falls, though, received positive news late last week when developer Louis Yip's firm, Tai-O Associates, hand-delivered checks totaling $254,000 that Yip owed in back real estate taxes. The city had scheduled a tax sale on the property at City Hall on a condominium development and an undeveloped mill building.

"The city is grateful for that," Central Falls receiver Robert Flanders told the Associated Press.

In a commentary published Monday, Bank of America Merrill Lynch praised Rhode Island for passing measures to keep Central Falls-type financial problems from spreading, though its analysts admonished: "It remains to be seen how well such measures will be deployed in the field."

Such moves include requiring municipalities to prepare five-year budget forecasts and to quantify any changes in pension or health benefits with the state's Division of Municipal Finance.

In addition, cities and towns must provide various financial reports with that division to allow for red-flagging of possible deficits.

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