Rhode Island.

West Warwick was downgraded last week by moody's Investor's Service to Ba from Baa because of cash flow problems and a deficit.

The rating change covers the town's $4.9 million of uninsured outstanding debt.

The town is attempting to erase a $4 million deficit caused by unexpected school spending and a poorly performing Sewer Enterprise Fund, according to a report written by Michael Johnston, a vice president and manager of Moody's Northeast region.

In addition to the deficit, West Warwick is currently operating without a budget. Residents at the town's yearly financial meeting last month rejected an attempt by the board: of selectmen to insert a 26% tax increase in the 1994 fiscal year budget plan.

As West Warwick has no budget in place and the fiscal year began on July 1, the town has implemented emergency legislation that authorizes bills and salaries to be paid using fiscal 1993's calculations.

Moody's said a diverse tax base and relatively high average wealth levels are still a positive for the town.

West Warwick is a community of about 30,000 people located 18 miles south of Providence.

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