Fitch cites New Haven’s economic growth and development, expanding tax base, improved reserves, and improved operating performance.
NEW HAVEN, CT – Today, Mayor Justin Elicker celebrated the upgrade to the City of New Haven’s bond rating by Fitch Ratings, which raised its Issuer Default Rating (IDR) and general obligation (GO) bonds rating for the city from ‘BBB+’ to ‘A-’ and issued a “stable” outlook for the years ahead.
“Fitch’s bond rating increase is another important validator of our collective stewardship of the city’s finances, the budget reforms we’ve put into place, and the overall progress we’re making as a city to strengthen both our short-term and long-term financial health.” said Mayor Elicker. “The work we’ve done with the Board of Alders and our State Delegation to strengthen the city’s financial position continues to translate into real results. Economic growth, an expanding tax base, and increased revenues coupled with balanced budgeting, limited borrowing, and responsible spending, have been a recipe for success. It’s enabled us to provide residents with the essential city services they deserve while also improving New Haven’s long-term financial health. We still have a long way to go, but the progress we’re making is something we can all be proud of and that we’re committed to build on moving forward.”
Issued earlier this afternoon, Fitch noted the rating increase reflected the city's improved financial health in recent years, including a rise in the city’s reserve funds (rainy day fund) from 2.8% of its annual budget spending in 2019 to 8% by 2023. The rating agency also highlighted the city's economic growth and development, including projects like Yale New Haven Hospital's $838 million neuroscience center, along with an expanding tax base supported by other new residential, lab, and medical office developments.
The rating increase helps reduce the interest rate on current and future borrowing, saving city taxpayers money.
Since 2020, when Mayor Elicker first took office, the city has produced five straight years of budget surpluses and steadily increased its fund balance to its current rainy-day fund total of $50 million. Just last week, Mayor Elicker announced a $16.4 million budget surplus for the most recent 2023-24 fiscal year, with $3 million of those funds surplus funds being assigned to support New Haven Public Schools and $13.4 million towards the city’s rainy day fund.
Mayor Elicker has also instituted several financial best practices including responsible spending that does not exceed inflation, holding the line on city borrowing to $30 million per year for critical infrastructure projects, and properly forecasting the performance of and making the required investments into the city’s pension funds.
The rating upgrade is the third for New Haven in the last three consecutive years. Last year, the S&P Global Ratings issued a bond rating increase from ‘BBB+’ to ‘A-’, and the previous year Fitch Ratings increased the city’s bond rating from “BBB” to “BBB+”.
PRESS CONTACT
Lenny H. Speiller: (203) 725-4249; lspeiller@newhavenct.gov
