Moody's Ratings downgraded Democrat-led Baltimore City's bond rating this week, highlighting a rapidly deteriorating financial situation as declining reserves, depleted utility funds, and mounting borrowing costs strain the crime-ridden metro area best known for the hit HBO series The Wire.
Local outlet Fox Baltimore reports that the ratings agency lowered Baltimore's rating from Aa2 to Aa3, citing "declining fund balance and cash levels across all government operations," with much of the deterioration concentrated in utility and internal-service funds.
Moody's explained that the city's finances have weakened since the COVID-19 pandemic, despite efforts and forecasts aimed at stabilizing reserves. The new Aa3 rating remains investment grade, but the downgrade suggests that the municipal bond market will demand a higher rate when lending to the city.
In a statement, the ratings agency said the downgrade "reflects the trend of declining fund balance and cash levels across all government operations, largely concentrated in the utility and internal service funds."
Economist Anirban Basu warned that the city's financial position is deteriorating and that this is "not great news."
"This is a city now with over $4 billion in ou
