Tags: US | LA | City | Budget

Moody's Cuts LA Credit Rating, Warns of More Downgrades

Wednesday, 07 Apr 2010 02:36 PM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink

The Los Angeles City Council and employee unions are investigating whether Mayor Antonio Villaraigosa has the authority to shut down municipal services two days a week.

The city's financial crisis led Moody's Investors Service to downgrade the city's credit rating and warn that the city risks further downgrades.

Moody’s cut L.A.’s general-obligation bond debt rating to Aa3 from Aa2. That puts the city at the lower end of what Moody’s considers a “high quality” security. A weaker credit grade typically means higher borrowing costs.

Moody’s said its ratings cut “primarily reflects the continued erosion of the city's historically better-than-average willingness and ability to quickly rebalance its budget mid-year.”

The downgrade also “partly reflects the likelihood that the city's general fund reserves at the end of the current fiscal year could be materially weaker than we had previously expected, now that an expected transfer from the Department of Water and Power may be reduced.”

Meanwhile, a spokesman for Councilman Bernard Parks says the council may have to approve the plan to curtail several services starting Monday. Services that don't generate revenue — such as libraries, parks and community centers — would be affected.

The mayor's office did not immediately respond to a request for comment.

The mayor announced his cutback plan Tuesday after a city controller report warned the city would run out of cash by May 5.

© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
Privacy: We never share your email.
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

Romney Shows Staying Power as Rivals Falter

Thursday, 10 Nov 2011 11:12 AM

Republican presidential candidate Mitt Romney may feel he has something in common with the late comedian Rodney Dangerfi . . .

Goodbye 2010, and a Tentative Welcome to 2011

Friday, 31 Dec 2010 19:29 PM

The year that ends at midnight was, like all years, a mixed blessing. On the good side, it was a year that saw the Repub . . .

'The Pacific' Does Marines Proud

Monday, 03 May 2010 18:51 PM

President Barack Obama reprimanded top Pentagon officials last year for pressing publicly for a troop increase in Afghan . . .

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved