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Standard & Poor's downgrades Los Angeles' credit rating
A view of City Hall in downtown Los Angeles, Calif.
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Standard & Poor's downgrades Los Angeles' credit rating
Standard & Poor's downgrades Los Angeles' credit rating
In a move that will likely cost the city of Los Angeles millions of dollars, Standard & Poors downgraded the city's credit rating to AA-.
The downgrade by Standard & Poors comes as the city faces plummeting tax revenues and a nearly $700 million deficit.
City Administrative Officer Miguel Santana said it means L.A. will pay millions more to borrow money — which it must regularly do to maintain cash flow.
The downgrade follows a decision by Moody’s Investors Service to place the city on a negative credit watch list.
“To have yet another agency give a negative rating to our actions — people should feel more pressure," Councilwoman Jan Perry said.
The city council already has approved a plan to eliminate 4,000 city jobs.
Santana said ratings agencies want see that the plan "actually reaches fruition and is completed."
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Mayor Antonio Villaraigosa has said the only way to avoid layoffs is for all city workers to accept across the board pay cuts.
Standard & Poors downgraded L.A.’s credit rating from AA to AA-.
It also downgraded the Municipal Improvement Corporation of Los Angeles — which the city also uses to borrow money — from AA to A+.
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