Moody’s Investors Service last week downgraded Binghamton’s general obligation rating to Baa1 with a negative outlook from A3. The downgrade affects $42.5 million of outstanding debt.

Moody’s cited the “city’s distressed financial position and extremely limited liquidity driven by operating deficits in four of the last five years” as reasons for the downgrade. The operating deficits were the result of “poor fiscal oversight” that relied on reserves even as state aid increased, Moody’s said.

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