Boston's AAA bond rating affirmed by Moody's and Standard and Poor's
March 10, 2015
Mayor Martin J. Walsh today announced that both Standard and Poor's Rating Service and Moody's Investor's Services have affirmed Boston's AAA bond rating, the highest possible credit rating a City can receive. Both agencies cited the City's sound fiscal management under Mayor Walsh's leadership and the strong and growing local economy. "These top credit ratings are a testament to the strong fiscal management that we have implemented to strengthen our city now, and for the long term," said Mayor Walsh. "We will continue to make smart fiscal decisions that will allow our neighborhoods, schools and local economy to thrive."
"The AAA rating reflects Boston's sound fiscal management of a stable financial position and the city's substantial and economically diverse tax base bolstered by strong government, health care and higher education sectors," said the Moody's rating report.
"We consider Boston's economy very strong," said the Standard and Poor's rating report. "Boston is the 21st-largest city in the nation and the economic hub of New England. The city is the state capital and center for government-related activities. In addition, its economic strengths include world-renowned bio medical research capabilities, a large and broad-based high-tech and life science sector, and a substantial financial services sector. Supporting these strengths are a well-educated workforce and world-class higher education and academic medical centers, both within the city and surrounding area."
Additional factors for the favorable rating include:
- The city is the center of economic activity for New England and boasts a substantial tax base of over $109 billion;
- Local unemployment below the national average at 4.5 percent;
- 272 projects in the pipeline at the Boston Redevelopment Authority, totaling $23 billion in development costs;
- Projected per capital effective buying income at 126 percent of the national level;
- Strong budgetary flexibility with 2015 audited available reserves in excess of 20 percent of general fund expenditures and no plans to materially draw them down;
- Property taxes account for 63 percent of revenue, and collections are strong and stable;
- Assessed values increased 10.9 percent, the largest since 2007, attributable to 12 percent residential growth and 8.8 percent commercial growth.