Philadelphia's financial fortitude scored a major win, with S&P Global Ratings bestowing upon the city its highest credit rating in over 40 years. The upswing to an 'A+' rating is lauded as a boon for potential infrastructure developments, promising to slash interest rates on the city's borrowings. This marks the second bump during Mayor Cherelle L. Parker's term, a follow-up to Fitch's June boost, showing a steady upward economic trajectory.
Thriving with foresight, Philadelphia's fiscal discipline, anchored by a steady bolstering of its pensions and the rebuilding of its budget stabilization reserve, has not gone unnoticed. S&P, amid a skyline of economic undulations, has tipped its hat to “Philadelphia’s demonstrated long-term commitment” as reported on the city's official website. The city's strong economy as a regional leader boosted S&P's positive assessment.
In a declaration mirroring the city's ebullient mood, Mayor Parker, as per the city's announcement, shared her delight, attributing the solid fiscal improvements to the dedicated teams led by Finance Director Rob Dubow. Emphasizing the city's socioeconomic diversity and pension fund strength—now at 62.2% funding level, the highest in two decades—Mayor Parker sees the upgrade as an affirmation of Philadelphia's strategic trajectory. This could lead to taxpayer savings for residents due to lower borrowing costs for city projects.
However, it's not all on a note of unreserved optimism. While S&P acknowledges the city's strides in combating poverty and joblessness, it casts a critical eye on Philadelphia's socioeconomic measures when stacked against similar cities. This lends weight to Mayor Parker's focused investments, aiming to mold Philadelphia into the "Safest, Cleanest, Greenest Big City with Access to Economic Opportunity for All," according to the official announcement.
Philadelphia ended the last fiscal year with a $942.9 million fund balance, a slight decline from the previous year, and bolstered its Budget Stabilization Reserve Fund with an additional $58 million. Some of the city's success comes from leftover federal stimulus funds and delayed hiring, but its strong financial management, particularly with its pension fund, boosts its reputation. Before its recent bond sale for the Neighborhood Preservation Initiative, the city’s improved credit ratings reflected its financial progress.
