Money can either be man’s worst enemy or best friend depending on how well it is managed. Financial mismanagement has seen great regions fall to their knees. At the end of the day, it does not matter how much a county earns or borrows. Instead, it makes better sense to look at the county’s ability to wisely manage its debts and finances. Going forward, the leadership of Racine County must be well informed of the long-term implications of their loans and expenditure habits.
Foxconn Project Approved by the County
Racine County plans to borrow $79.2 million to finance the Foxconn land acquisition. The approval for the loan by the Racine County Board was unanimous. It is the plan of the county to use $70 million of the funds in Area 1 of the development, then the $5 million will then be used for other related projects while $3.3 million will cater for the interest accrued. The remaining $573,000 will be used in operational expenses.
It was foreseeable that the loan would to some extent negatively affect the county’s credit ratings. According to Moody’s ratings, the ratings simply fell from Aa1 to Aa2. All the same, it was the opinion of the board that the slight drop in ratings would not affect the county so much. After all, borrowing for the Foxconn project was a financial step they had to take.
By the time the county gets the expected extra borrowing of $ 62.6 million Racine’s debt would be hitting the ceiling of around 200 million. Now, this should be a perfect reason for the county’s leadership to start getting worried. The credit ratings would obviously go lower than they are at the moment. The financial reputation of the county will consequently be adversely affected.
According to the FBI, the significant increase in reverse mortgages has created a good opportunity for the fraudsters. Given the already glaring future financial burden, Racine County must make sure that it fully understands all the details given to it by the lenders. The signing of every documentation must only be done after thorough consultation and professional assessment. Otherwise, it may end up paying back more than it deserves, thanks to unscrupulous lending practices.
Putting Budget to Solid Use
The unanimous approval by the county board to let the city of Burlington to pay $183,000 every year would go a long way in mitigating the huge debt. The money would help the county cater for the expenses in the fire and police department. Furthermore, the allocation of $10,000 to the Gateway Technical College Foundation to help the students from disadvantaged backgrounds was a noble move by the government. The county is also considering joining the other 20 counties that have already filed a suit against the opioid manufacturers. The harmful substance has robbed the county of its youthful labor force; a very vital section of the populations that can help it finance its debts if they are in their rightful productive form.
Debts and money management for a county is an issue which must be handled keenly to avoid economic crises. Poor money management can make the leadership of the day lose its legitimacy among the citizens.