By Theo Emery, Globe Staff
WASHINGTON – A credit-rating agency has warned a dozen Massachusetts communities, including Hingham, and two school districts, that they could face credit downgrades as a result of the impasse in Congress over raising the federal debt limit.
Moody’s Investors Service announced late yesterday that it is reviewing credit ratings of 162 local governments in 31 states that could be affected if the federal credit rating is downgraded.
The reviews illustrate how the looming crisis could have an immediate impact on municipalities that rely heavily on Treasury bonds and federal funds.
“The ratings of these local governments, particularly those with a high economic dependence on federal activity, would be vulnerable to a downgrade of the U.S. government,” Moody’s Senior Vice President Matt Jones said in announcing the review.
All of the US House members from Massachusetts scrambled to respond with a letter to Moody’s challenging the reviews. That letter is expected to be sent later today.
The agency’s reviews will focus on potential federal job losses in the towns, as well as the local government’s “reliance on capital markets, its dependence on federal revenues, its sensitivity to macroeconomic cycles, and its available financial resources to offset these risks,” according to Moody’s.
The communities that Moody’s has promised to review are: Action, Bedford, Belmont, Brookline, Concord, Dover, Hingham, Lexington, Newton, Wayland, Wellesley, and Weston.
In addition, the Concord-Carlisle Regional School District and the Lincoln-Sudbury Regional School District are receiving reviews.
Theo Emery can be reached at firstname.lastname@example.org. Follow him on Twitter @temery.