After Approval Of HPD-HFD Pay Parity, Credit Rating Agency Downgrades Houston's Outlook
Credit rating agency Fitch has changed the City of Houston’s outlook from stable to negative after the passage of Proposition B in the November 6 midterm election. Proposition B establishes pay parity between the local police and fire departments.
A Fitch report released this week says that the implementation of the pay parity “will exacerbate an already challenged budgetary profile.”
Fitch notes that the City of Houston has shown “an ability and willingness to adjust spending levels to counter revenue limitations and periods of revenue weakness and to maintain sound reserves,” while adding that such expenditure flexibility “will be tested over the near term given the combination of the new charter amendment,” in reference to Proposition B.
The credit agency also mentions increased pension-related spending and existing budgetary pressures as factors to take into account. Moreover, the report touches on the revenue cap voters approved in 2004.
Read more: https://www.houstonpublicmedia.org/articles/news/city-of-houston/2018/11/16/312349/after-approval-of-hpd-hfd-pay-parity-credit-rating-agency-downgrades-houstons-outlook/
