Moody’s Investors Service cut Pullman, Wash.’s general obligation bond rating to A1 from Aa3.

“The downgrade primarily reflects the city’s trend of unbalanced financial operations that have resulted in multiple deficits and narrowing reserves to weak levels,” Moody’ said in a report released Tuesday.

The rating change affects $1.35 million of debt. The firm said the city has a history of unbalanced financial operations and relatively weak reserve levels.

However, it also said Pullman, home of Washington State University, has a stable local economy, strong tax base and minimal debt burden.

Moody’s said high growth in assessed property valuations and major increases in economic growth could move the city’s rating back up.

But if the structural budget imbalance continues and Pullman leaders decide to continue to use reserves, further downgrades could follow.

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