Detroit’s Credit Checks Out—For the First Time in Years!
Good news has been in a constant state of influx in recent years for the Motor City, Detroit. This month brings even more good news, this time in the form of a credit rating.
Since the city fell on hard times—and appeared to overstay its welcome—it’s credit ratings, and overall reputation, has been in the dumps. However, three years after rising from the ashes of a bankruptcy filing, the city’s finances are looking surprisingly favorable.
According to Moody’s Investors Service, Detroit could see another positive increase in credit ratings in the next two to three years if the city maintains its current status.
The recent improvements are thanks to a healthy fund balance and liquidity. Job growth is also on the rise, which creates mounting income taxes and the city’s new and very conservative form of fiscal management is keeping expenses below revenue.
“When we exited bankruptcy, many questioned whether Detroit would be able to manage its finances going forward,” Mayor Mike Duggan stated. “Two credit rating upgrades in less than three years and a positive outlook from Moody’s show just how fast our financial turnaround is succeeding.”
Of course, these increases in credit ratings are all dependent on sustained growth and a clear distinction in the current demographic patterns.
The current rating, a B1 rating, is actually five notches higher than its previous increase in 2013.
“Moody’s report illustrates that we have strengthened the City’s financial position, have strong financial planning and budgeting practices, and are making the right decisions to ensure the City’s short-and long-term fiscal sustainability,” John W. Hill, Detroit’s chief financial officer added to Mayor Duggan’s statement.
This announcement followed shortly after Mayor Duggan declared his proposal to endow $125 million in bond funds to rejuvenate the city’s commercial strips.
News & Image Source: http://www.mlive.com/news/detroit/index.ssf/2017/10/detroits_credit_rating_upgrade.html