Moody's Investors Services maintains city's downgraded credit ratings
SPRINGFIELD, Ill. (WICS) —
Moody’s Investors Services issued a report that gave Springfield news about the outlook of the city’s credit rating.
As of now, Springfield’s current deficit is $11.5 million and city officials are looking to get it resolved.
"It sends a message to our citizens, not just debt holders, and the message it sends is these guys don't have a financial house in order and we're trying to prevent that. The mayor is trying to prevent that," Director of Budget Management Bill McCarty said.
The deficit, as well as unfunded pension liability and high retiree benefit burdens, led to a report from Moody’s.
"What they do is they come back and they look at our current rating and make a determination of whether or not we deserve to stay at that rating," McCarty said.
The report ultimately led to maintaining the city's downgraded credit ratings from 2016.
"Now if we go down in that rating that means we are less creditworthy and if we are less creditworthy. That means if we go out to borrow money, particularly if we issue bonds. We pay more for that in interest," McCarty said.
The report also revised the outlook for the city from stable to negative.
"It's not imminent, they do this surveillance about once a year," McCarty said.
However, it is not all bad news. Moody’s report still sees the city as able to pay its debts.
"The credit registries are going to look at a lot of different factors. But the bottom line it comes down to is are they able to repay their debts and the likelihood that they're able to," Financial Advisor Dan Pietroburgo said.
As a result, the city is working to raise its ranking. That is coming through the city’s attempts to pass a sales tax increase as well as raising the city’s telecommunication tax.