Tourism backlash over immigration law could cost Arizona bond rating, tens of millions

They come for the sun, the golf, the Grand Canyon and the Painted Desert.

But as tourists increasingly shun Arizona over the state's new immigration law, their desertion is likely to spill some paint of their own: red ink stains all over state and local budgets.

Nineteen conferences have been canceled so far in Arizona as a result of the legislation adopted last month, according to a Moody's Investors Service report Monday. The desertion — with threats of more to come on the horizon — casts a cloud over the state's bond rating, according to the Moody's outlook reported by Bloomberg News.

Arizona was among the states hit hardest by the home-mortgage meltdown, and threats of travel boycotts have only darkened the state's financial picture. Tourism spending produced $1 billion in state and local tax revenue for Arizona in 2008, Moody's said.

"Preliminary response to the immigration legislation has already had some impact on the state's tourism/travel sector," Maria Coritsidis, a Moody's analyst, wrote in this week's report from the ratings company. "A serious weakening of this important sector, however, could have a negative impact on the state's credit, as it could lead to further weakening of state finances that have already been negatively affected by the recession."

rest at http://rawstory.com/rs/2010/0511/arizona-law-threatens-states-bond-rating/