Fitch Ratings revised its outlook to negative from stable on Akron’s limited-tax general obligation debt, income tax debt, and certificates of participation. It also affirmed its AA-minus rating on the limited-tax GO debt, its A-plus rating on the income tax bonds, and its A rating on the COPs.
The negative outlook comes as the city faces decreased financial flexibility and difficulty in achieving balanced operations, analysts said. More than half the city’s revenue comes from income taxes, which have declined steadily since 2008.
“If Akron does not restore fiscal balance and begin building reserve levels, the ratings may be downgraded,” Fitch said.
Moody’s Investors Service in late October downgraded the city’s GO debt to A2 from A1 and its income-tax backed debt to A3 from A2. Standard & Poor’s rates the GOs AA-minus.
Akron’s debt totals roughly $780 million, much of which is utility-related.