Moody's Investors Service said it has downgraded Raton Public School District, Texas's general obligation rating to A3 from A2.
Concurrently, Moody's has assigned a negative outlook.
The downgrade and negative outlook affects $2.265 million in Moody's-rated general obligation debt. The debt is secured by an unlimited ad valorem tax levied on all taxable property within the district.
The downgrade to A3 reflects the district's narrow reserves, moderately sized tax base, and slightly below average socioeconomic indices. The rating also incorporates the district's modest debt burden with rapid payout.
The negative outlook reflects the district's continued budgetary challenges, particularly due to declining enrollment, that are expected to reduce reserves further.