ALLENTOWN, Pa. — Allentown officials on Wednesday celebrated a credit-rating upgrade as the reward for “solid fiscal management” in recent years.
Moody's, the company that publishes credit ratings, boosted the city's rating from A3 to A2 to recognize its “much-improved financial position,” Allentown Finance Director Bina Patel said at a news conference in City Hall.
The A2 rating signals Allentown has “a strong ability to repay short-term debt obligations,” according to Moody’s.
A 27% tax increase in 2019 — the city’s first in more than a decade — “helped the city to achieve structural balance following the long history of budget gimmickry."Moody's, in a news release
Allentown held its A3 rating for more than a decade after Moody’s downgraded it from A2 in 2012.
A 27% tax increase in 2019 — the city’s first in more than a decade — “helped the city to achieve structural balance following the long history of budget gimmickry,” Moody's said in a release.
That massive tax hike also helped the city stave off a credit downgrade from Moody’s in 2019.
Allentown’s economic growth and increasing tax revenues, along with “prudent expenditure controls,” also were cited as factors in Moody’s decision to upgrade the city’s rating.
The upgrade shows “Allentown is financially robust, ready for the future and open for business,” Mayor Matt Tuerk said.
Allentown should see significant savings on its interest payments by reaching new investors after earning the new rating, Tuerk said.
The city could save up to $500,000 on Tuerk’s much-touted plans to rebuild the Central Fire Station and the Allentown Police Department’s headquarters, according to Tom Beckett, managing director of NW Financial Group.
“We will need to borrow money to make those investments,” Tuerk said. “As a result of this credit-rating improvement, the cost of borrowing money will decrease.”
