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If Home Prices Drop, Will U.S. Local Government Revenues Follow?

Despite recent investor concern, Fitch Ratings does not expect that local governments will be exposed to large revenue declines if home prices drop, according to a new report

Fitch to Monitor Impact of Denver School District Teachers Walkout

The district and DCTA are scheduled to resume negotiations on a new collective bargaining agreement (CBA) today. It appears that the impasse relates to district policy in how it allocates voter-approved property tax levies for a portion of teacher compensation. Such teacher compensation policies are not a focus of Fitch's analysis; however, Fitch would be concerned if these changes impinged upon the district's expenditure flexibility.

Quiet 4Q Caps Stable 2018 for US Municipal Rating Actions

Stable economic growth led to another solid year for U.S. public finance with annual upgrades exceeding downgrades for the year. Both upgrades and downgrades in total were down for the year. Fitch reports 89 muni downgrades in 2018 versus 166 downgrades in 2017.

Why Forum

Why “Perverse Incentives” Are Hurting the Solar Market

Infrastructure analyst Cherian George looks at changes in the solar panel market. Growth in residential solar panel installations has sputtered in recent years and an eerie parallel from a decade ago — namely elements of the mortgage crisis — may be part of the reason.

Oakland Teachers Strike Vote Will Not Trigger Downgrade; Highlights Pressures

Fitch Ratings does not expect to take rating action on the Oakland Unified School District's 'BBB+' Issuer Default Rating (IDR) based solely on the Oakland Education Association's (OEA) vote to authorize a strike as early as Feb. 15. 

TX Tax Proposals Could Limit Local Government Revenue Flexibility

Bills recently filed in both chambers of the Texas legislature propose to significantly lower the rollback property tax rate for local Texas taxing entities with a certain amount of annual tax revenue and require ratification elections if rollback rates are exceeded. This legislation if enacted could negatively impact Fitch's assessment of certain local governments' independent revenue raising ability.

Alaska Proposals to Limit Budget Flexibility Could Pressure Rating

Potential amendments to Alaska's constitution proposed by the governor last week would constrain the state's ability to proactively manage its financial operations and could result in negative pressure on the state's Long-Term 'AA' Issuer Default Rating (IDR)/Stable Outlook, according to Fitch Ratings. 

TX K-12 Funding Proposals Would Boost Rev Expectations

Public school funding proposals from both the Texas House of Representatives and Senate for the 2020-21 biennium include sizable increases, which if realized would boost near-term revenue growth expectations for Texas school districts, according to Fitch Ratings. 

California Municipalities Brace for Next Downturn

California credits, specifically the state, counties and cities and school districts, are all better prepared to manage through the next economic downturn; however, some school districts throughout the state may feel its effects more acutely, according to a new Fitch Ratings report.

PG&E Bankruptcy Not Likely to Affect US Public Finance Ratings

PG&E Corporation's planned bankruptcy filing is not likely to adversely affect the credit quality of the state of California, its local governments or publicly owned utilities (POUs), according to Fitch Ratings.

California School Oversight Regime Remains Strong Despite Recent Changes

California's school district oversight procedures remain fundamentally strong even after recent changes, and Fitch Ratings' school bond ratings are unlikely to be affected by the changes. 

L.A. Teachers Strike Will Not Trigger Downgrade; Highlights Pressures

No further rating action on the Los Angeles Unified School District's issuer rating based on the teacher union's decision to strike on Jan. 14th. The strike was postponed from Jan. 10th due to disputes about the notification period and concern about a possible court injunction.

Kentucky Benefit Changes Unlikely to Affect Pension Burden Near Term

As a new legislative session begins in Kentucky with pension changes likely up for debate, the commitment to address rising expenditure demands, particularly for pensions, remains a key determinant in the trajectory of the commonwealth's 'AA-'/Stable Outlook Issuer Default Rating (IDR), according to Fitch Ratings. 

Gov't Shutdown Effects Limited for US Public Finance Credits

The ongoing federal government shutdown should not have significant effects on U.S. public finance credits. The partial shutdown is only affecting around 20%-25% of the federal government, and funding critical to rated sectors remains in place. However, there are risks of localized economic effects in areas with large concentrations of federal employees and the potential for credit risks will grow the longer the shutdown continues.

Data Breaches Highlight US Public Institutions' Cyber Risks

The recently reported data breach at San Diego Unified School District, affecting the personal data of as many as 500,000 students, underscores the heightened threat of cyberattacks that educational, governmental and healthcare organizations face due to the sizable amount of personal data housed on their networks. Cyber risk is not a driver of credit risk or rating actions. However, our ratings reflect issuers' overall resilience to manage and respond to changes in its operating environment, including risks associated with cyberattacks. 

What to Watch

ACA Repeal Would Be Negative for Non-Profit Health Providers

Any reduction in the Affordable Care Act (ACA), either through repeal, piecemeal legislative efforts or legal challenges to its constitutionality, is detrimental for the U.S. not-for-profit healthcare sector, particularly in those states that have or are expanding Medicaid.

Experience Credit Outlooks 2019

Our annual Credit Outlooks are now available. We're producing reports, video, webinars, and commentary across all sectors and regions to give you in-depth insight into credit in 2019 and beyond. Read the Compendium Report of 2019 Outlooks (complimentary with registration)

View More Credit Outlooks for 2019

Outlooks 2019

U.S. Higher Education Sector Outlook to Negative for 2019

Various industry challenges are increasingly pressuring U.S. colleges and universities, widening the credit gap in the sector and prompting Fitch Ratings to revise its higher education sector outlook for 2019 to negative, as detailed in the rating agency's outlook report. 


Dan Champeau


Dan Champeau

Analytical Group Head

+1 212 908 9188

Ann Flynn


Ann Flynn

Business Group Head

+1 212 908 9152

Jack Archibald


Jack Archibald

Business - Fees

+1 212 908 0664

Jessalynn Moro


Jessalynn Moro

Head of Public Finance

+1 212 908 0608

Laura Porter

Tax-Supported - States & Locals

Laura Porter

Sector Head

+1 212 908 0575

Dennis Pidherny

Revenue-Supported - Public Power and Water & Sewer

Dennis Pidherny

Managing Director - Public Finance

+1 212 908 0738

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