Moody’s Investors Service affirmed its underlying Aa3 on the Rockford School District but revised the outlook to negative due to a pressured fiscal position.

The rating action affects $125.8 million of outstanding general obligation debt.

The district is located in Kent County just outside of Grand Rapids. Its tax base is a substantial $3.3 billion and is expected to remain stable over the near term, Moody’s said.

Its general fund reserves have declined for three consecutive years, according to Moody’s. Any further declines could have a dramatic impact on the district’s finances, analysts warned.

The district receives 75% of its funding from the state, a source that could come under pressure due to Michigan’s own tight finances.

Recent budget adjustments should lead to some improvements, Moody’s said.

“The negative outlook reflects our expectation that the district’s financial position will continue to be pressured in the near term,” Moody’s said in a report.

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