Philadelphia School District's Ba2 rating was placed on review for a downgrade by Moody's Investors Service, which cited a delay in approving the budget.
The review affects the district's $3.3 billion general obligation and GO-secured lease debt.
Moody's put the district on review because it has failed to adopt a budget by a city charter specified June 1 deadline, the rating agency said in a report June 6. The district's fiscal year starts on July 1.
The district is seeking an additional $440 million, saying this is necessary for bare boned operations.
In the week of June 5 Philadelphia's city council approved using a portion of city sales tax for school revenues.
Philadelphia Mayor Michael Nutter is trying to get the Pennsylvania government to approve a cigarette tax for the district.
Moody's action doesn't affect its Aa3 enhanced rating of the district, which stems from its participation in the Pennsylvania Fiscal Agent Agreement Intercept Program.
