Moody’s Investors Service downgraded St. Louis‘s General Obligation (GO) rating from A3 to Baa1 onMay 2, with a stable outlook. Moody’s also downgraded St. Louis Municipal Finance Corporation’s (MO) outstanding lease revenue debt from Baa1 to Baa2 for more essential purposes and from Baa2 to Baa3 for less essential services.
The revised outlook to stable reflects recent revenue enhancements and the Board of Estimate and Apportionment policy change dedicating 1.5 percent of annual payroll expenditures to rebuilding revenues. However, Moody’s noted the city’s reserves will remain challenged over the near term and competition for city resources will remain outsized for the medium term, as resources have been redirected to less essential purposes.
This downgrade should be unacceptable to all St. Louisans. And what is most disappointing is that it did not have to happen. Moody’s warned us in March 2017 that we cannot continue increasing the city’s general fund debt for nonessentials. Then, I immediately warned city leaders that we could not fund nonessential projects like the renovation of Scottrade Center without a negative consequence. Yet other city leaders did not collaborate on an alternate financing structure.
This Moody’s downgrade should serve as a wake-up call to all city leaders. We cannot continue to prioritize incentive packages to special interests that rely on the city’s credit and general fund.
My office will continue to advance strong fiscal management, and we will continue to advocate and push for the responsible use of tax dollars. But strong fiscal management needs to be a team effort; the City of St. Louis cannot climb back out of this hole if the legislative and administrative functions choose to dig the hole deeper.
Comptroller Darlene Green is the chief fiscal officer of the City of St. Louis and is charged with safeguarding the city’s credit rating and with protecting taxpayer dollars. Visit www.stlouis-mo.gov/comptroller.
