Buffalo, NY—The City of Buffalo’s credit rating from Standard and Poor’s was released today, it remained A+ with the future outlook being “negative” though there is a strong possibility that it will be amended to “stable” after state and federal aid payments are received.
Mayor Byron W. Brown said, “I am pleased that S&P recognized the budgetary actions we took to reduce costs, sustain economic growth during the pandemic, and exercise strong fiscal controls which resulted in the City maintaining its A+ rating. I am confident that the ‘negative’ future outlook will be upgraded to ‘stable’ once our federal and state aid payments are received. I will continue to work with all of the rating agencies the City does business with to increase their awareness of our growing economy, strong fiscal policies that promote growth, and strategic investments designed to secure Buffalo’s financial future.
The report highlighted several specific actions the Administration took while managing the City budget over the past year. This included several cost-cutting measures, strategic personnel decisions, and actively pursuing special revenue streams designed to help the City manage its pandemic response. Mayor Brown will continue to pursue several of these cost control measures, like remote working for some employees, while also making strategic investments in departmental initiatives that create efficiencies and structural savings even after federal and state aid have been received to continue improving the City’s fiscal position.
While pleased with the overall assessment by S&P, there were portions of the credit rating report the Mayor felt needed to be revised in consideration of the City’s economic outlook. The diversification of the region’s economy, strong housing market, higher than anticipated sales tax revenues, and projected increases in tax revenues from the tourism industry once the vaccine is more widely distributed all indicate a strengthening economy that will improve the City’s future fiscal position. The Mayor did not feel these factors were taken fully into account when describing Buffalo’s economy or long-term budget outlook.
“My Administration’s policies have been directed towards promoting equitable economic growth and giving sensible tax relief while also delivering high quality services to the low-income and working-class families that make up our neighborhoods,” said Mayor Brown, “We will continue pursuing these policies as I lead the City to economic recovery just like I did after the last Great Recession.”
At the same time that the $1.9 trillion American Rescue Plan is speeding its way through Congress, Governor Andrew Cuomo’s proposed state budget contained provisions that will restore most of Buffalo’s deferred AIM payment from last year while also funding a significant portion of the AIM payment Buffalo would have
received in the 2021-2022 State budget. Both of these actions were noted in the S&P credit rating report and gave the agency enough confidence to state that it could amend the City’s future outlook to “stable” once those payments are received.
The City is also working with its intergovernmental partners to access another $2 million in federal disaster relief from FEMA that will be used to reimburse costs associated with the City’s initial response to make its facilities and vehicles COVID safe and enabled City employees to work remotely as a strategy to help slow the spread of the virus. It has also been announced that the City will not have to pay the 25% match to the federal government that it already had set aside for those funds.
These forms of intergovernmental aid are in addition to the resources the Mayor has worked to secure to assist small businesses, keep tenants in their homes, provide relief to small landlords, and support non-profits providing critical services during the pandemic. By aggressively pursuing federal funding for these programs, the City has been able to maintain a stable financial outlook for many of its residents who otherwise would have lost their homes or businesses. The S&P report highlighted how these actions have positioned Buffalo for a relatively rapid economic recovery after the pandemic.
A copy of the full credit rating report is available on Standard and Poor’s website.