S&P cites New Haven’s “encouraging finances” and “consistently improved available reserves” as drivers of upgrade.
NEW HAVEN, CT – Today, Mayor Justin Elicker celebrated the recent upgrade to the City of New Haven’s bond rating by S&P Global Ratings, which has raised its long-term rating and underlying rating (SPUR) on the city’s general obligation (GO) debt from ‘BBB+’ to ‘A-’. Simultaneously, S & P also assigned the city an ‘A-’ long-term rating and stable outlook for its $54.6 million series of 2023 GO bonds.
“S&P’s bond rating upgrade is another important validation of the financial path we’re on as a city and the progress we’re making from the budgetary reforms we’ve put in place in recent years,” said Mayor Elicker. “Through a combination of increased revenues, responsible spending, proper forecasting, limited borrowing and balanced budgets, we’ve been able to provide residents with the essential city services they need today while also improving the city’s long-term financial health and outlook in the future. Much work remains, but we’re making steady and significant progress and we’re poised for continued growth moving forward.”
S & P noted the rating increase reflected “the city’s demonstrated positive finances during the past three years, resulting in consistently improved available reserves due to more-conservative budgeting and management exerting more control of expenses while making necessary adjustments to keep the budget balanced.”
The rating increase also helps reduce the interest rate on current and future borrowing, saving the taxpayers money.
Since 2020, when Mayor Elicker first took office, the city has produced four straight years of budget surpluses and steadily increased its fund balance to its current rainy-day fund total of $43.9 million. This has been achieved through a combination of increased revenues -- including the doubling of New Haven’s state PILOT (Payment In-Lieu of Taxes) funding from $41 million to $91 million annually, the increase of Yale University’s annual voluntary contribution to the city from $13 million to $23 million, and the addition of other positive revenue streams from a growing local economy and tax base – while also engaging in responsible spending that does not exceed inflation, holding the line on city borrowing to $30 million per year for critical infrastructure projects, and properly forecasting the performance of and making the required investments into the city’s pension funds.
The rating upgrade is the second for New Haven in the last two consecutive years. Last year, the city received a bond rating increase from “BBB” to “BBB+” from Fitch Ratings, which Fitch maintained this year.
PRESS CONTACT
Lenny H. Speiller: (203) 725-4249; lspeiller@newhavenct.gov
