4/9/2007
Media Contact:
Justin Ohlemiller, [317] 327-3690
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S&P: City facing downgrade in credit rating without legislative action on Indy Works, crime package
Indianapolis – Standard & Poor’s (S&P) Ratings Service, one of the world's foremost provider of independent credit ratings, risk evaluation and investment research recently placed the City of Indianapolis on credit watch, specifically citing the need for action by the Indiana General Assembly to pass Indianapolis Works and other legislative priorities of Mayor Bart Peterson’s crime package.
While affirming the city’s AAA credit rating, the recent bond report by S&P explained that, “Given the likelihood of continuing and growing structural imbalances without the ability to raise additional revenue, the rating will be lowered if the city is not in a position to address its structural deficit, pension liabilities, and growing public safety needs in a meaningful way following the legislative session.”
Indianapolis retained its AAA bond rating, according to S&P, thanks to the city’s strong economy, good liquidity, and prudent fiscal management, which have allowed the city to “address fiscal challenges despite political difficulties.”
A “AAA rating” means lower bills for taxpayers on capital projects and improvements because it allows the city to borrow money at lower interest rates. Indianapolis is one of only a handful of cities nationwide to achieve and maintain a AAA bond rating.
“This most recent report from S&P shows just how dangerously close we are to losing our outstanding bond rating, which would cost the city and local taxpayers millions,” Mayor Peterson said. “The urgency for legislative action on Indianapolis Works and the rest of our crime package is certainly omnipresent and growing by the day.”
Peterson has been working with state legislators this session since announcing his crime package in January. The crime package would allow Indianapolis to invest $85-million in a long term plan to aggressively fight crime; pay off the decades-old, unfunded public safety pension liability; and provide property relief for Marion County residents.
To allow the city to implement the crime package, the Mayor has asked the Indiana General Assembly to approve:
- The remaining portions of Indianapolis Works, including the consolidation of township fire departments into the Indianapolis Fire Department, which would improve service and save taxpayers at least $15-million annually.
- Fiscal flexibility for local government, which would reduce property taxes, establish alternatives for financing local government, and create efficient and effective local government.
- Legislation to allow Indianapolis to borrow money and remove the public safety pension obligation from its operating budget.
- Property tax relief through a State takeover of child welfare expenses from the city-county budget.
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