More than two dozen New Jersey, New York and Connecticut communities hit hard by superstorm Sandy are facing a new threat—higher borrowing costs, the Wall Street Journal reported today. The devastation caused by last week's storm has brought renewed investor focus on the financial strength of local governments in the region and their heavy reliance on debt that must be repaid within a year or less. Many investors are particularly focused on New Jersey, given its dependence on short-term debt: 39 percent of the debt issued in the state in 2011 was short-term bonds, according to Thomson Reuters. In New York and Connecticut, short-term bonds accounted for about 16 percent of last year's borrowings.
