Two leading bond-rating agencies have raised concerns about New York City’s financial health should the new mayor’s budget, which involves using up reserves, be implemented.
Fitch Ratings and Kroll Bond Rating Agency issued a negative outlook for New York City’s bond rating on Friday, aligning with Moody’s, which had made a similar forecast the previous week.
While the agencies have not downgraded New York City’s current rating, they cautioned that if Mayor Zohran Mamdani’s $127 billion budget is approved, a downgrade is likely.
The proposed budget involves using $2.6 billion from the city’s rainy day funds and other savings over two years to fund some of the Democratic socialist’s initiatives.
“A negative outlook from a credit rating agency is not a downgrade—but it is a warning,” said city Comptroller Mark Levine.
“With today’s revisions from Fitch and Kroll, now three of our four ratings agencies are sending us a similar message: New York City needs to address the underlying structural imbalances in our budget.”
