NEW YORK - Moody's Investors Service has downgraded to A1 from Aa3 the rating on Perris Union High School District, Calif.'s $62.1 million outstanding General Obligation debt. The outlook on the long-term rating is negative.
The downgrade and negative outlook reflect the deterioration of the district's financial position. Moody's expects that the district will likely remain at this weakened level in the near-term, given that considerable expenditure reductions will be required to regain budgetary balance.
The district is planning to make significant expenditure reductions in the next fiscal year, but these reductions still require board approval, and, even with full enactment, will only bring the district to its legally required minimum reserve level if the governor's proposed tax measure is not successful.
If the tax measure were to be successful, the district's ending balance and cash balances would increase by $3.2 million to levels similar to fiscal 2012. The A1 rating also reflects the district's large tax base, below-average socioeconomic profile, and low debt levels.