Moody’s Investors Service downgraded Detroit’s bond rating today, citing uncertainty after the repeal of Michigan’s emergency manager law and a rising risk of municipal bankruptcy or default in the next 12-24 months.
Moody’s said Detroit’s inability to enact reforms meant to stabilize its finances was complicated by uncertainty after state voters repealed Michigan’s emergency manager law, Public Act 4, on Nov. 6, weakening state oversight of the city’s finances, Matt Helms reports in the Free Press.
The ratings firm noted Detroit’s “precariously narrow cash position,” with Mayor Dave Bing’s administration warning that it will have to put potentially thousands of city employees on furlough Jan. 1 to avoid running $5 million short on cash to meet payroll.
