San Francisco's Credit Rating Takes a Hit
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"Our Aa1 rating on the city's [general obligation] bonds assumes that the city will prepare a long-term solution to this funding challenge."
But making sure today's expenditures can be covered by tomorrow's cash reserves isn't San Francisco's thing -- in fact, it's hard to overstate how much that isn't our thing. And, yesterday, Moody's responded. The service downgraded the city's credit rating from Aa1 to Aa2, meaning the city will have to pay a higher interest rate on the scores of millions of dollars of bonds it's set to take out.
Moody's report cited the city's threadbare finances, its ongoing structural deficits and -- surprise, surprise, surprise -- the lack of political will to do much about it.
Notably , the explanation behind the downgrade specifically mentioned the defeat of Proposition B, which would have required city workers to contribute more to their pension and health care costs. Per the report: "The defeat in the election earlier this month of a local pension and health care cost control measure suggests that little near-term fiscal improvement is likely to result from external political pressure."
In other words, the terrifying economic conditions Prop. B purported to address weren't a goddamn joke. Sadly, Moody's earlier assessment that the city would undertake any sort of long-term strategy to address them was.
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