City leaders received positive news with upgrades by Moody’s Investors Service to the credit ratings on much of its outstanding debt.
Citing the “ongoing expansion of the city’s tax base and economy” and its strong finances, analysts from Moody’s upgraded the City’s issuer rating – the implied general obligation rating of the City – to Aa2 from Aa3. Moody’s also upgraded and affirmed other debt issues backed by various City revenue sources. Higher ratings generally result in lower borrowing costs in the future when compared to less creditworthy borrowers.
“We are thrilled by this news,” said Mayor Lenny Curry. “These upgrades are a recognition of the incredible strength of the Jacksonville economy and the disciplined approach to fiscal governance we have exhibited since taking office.”
Some of the major fiscal accomplishments of the Curry administration so far include enacting pension reform, reducing debt by more than $585 million, and adding over $155 million to reserves.
Moody’s specifically identified the closing of the three pension plans to new employees in 2017 as key. The groundbreaking reform put in place a plan to fully-fund the pensions over time through the extension of a sales tax beginning in 2031. The plan freed-up City resources in the short term to fund essential services and much-needed infrastructure improvements. Since the reform was put in place, over $715 million has been used to grow the City economy and protect its citizens rather than be diverted to fund pension contributions.
In addition to the issuer rating upgrade, Moody’s announced in their release upgrades of the City’s Special Revenue Bonds and Transportation Revenue Bonds to Aa3 from A1. Moody’s also affirmed the Aa3 rating on the City’s Better Jacksonville Sales Tax Bonds and the A1 rating on its Capital Improvement Bonds.
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