Detroit credit rated 'investment-grade', reaching milestone after historic bankruptcy
DETROIT (FOX 2) - The youngest people in the crowd wouldn't have understood, but the bottle of black ink the Detroit mayor held while standing at the podium on Monday meant a lot.
"One of our young finance people said ‘what’s so significant about black ink?' and I thought 'He's only been here 10 years, he doesn't remember the days of red ink,'" Mike Duggan said.
The past few decades have included a lot of red ink for the city of Detroit following year after year of tough financial reports and an eventual bankruptcy. But late last week, the city's financial ratings were raised to an "investment grade" for the first time in 15 years.
Moody's Ratings announced it was upgrading the city's financial rating on Friday - adding the city's outlook over the next 18 months was positive.
Detroit has climbed out of quite the hole over the past several years and on Monday, Duggan was joined by city leaders and officials, including its Chief Financial Officer Jay Rising, to commemorate the occasion.
Home values have doubled in the last five years, while Detroit has consistently balanced its budget over the last 10 years, the mayor touted. He also talked up the city's $479 million retiree protection fund, which helped stave off a "pension cliff" that worried many at the time of bankruptcy.
"Everybody in America is now recognizing the city of Detroit's financial comeback," he said.
He added that Detroit had impressed Wall Street because of how it's spent - and saved - the massive pot of money the city received from the American Rescue Act. Whereas other cities used their federal funds to balance their budgets, Detroit had moved their money into parks and affordable housing.
"We have to thank the businesses that made this possible. We are in the situation we are in because the income tax revenue has exceeded everyone's expectation," the mayor said.
The upgrade means Detroit will have more access to investing opportunities and smaller interest rates on loans it takes out.
Moody's Explains Upgrade
In its news release announcing its upgrade, Moody's said that despite Detroit facing a delicate economy and limited ability to raise money, as well as its social challenges, poverty rates, and negative population trends, it's persisting.
"Detroit's tax base valuation doubled over the past five years and ongoing development and appreciation of residential values will provide another boost in fiscal 2025," it said in its release.
It added strong governance practices will help its momentum continue improving.
Detroit's former emergency manager reflects on city's bankruptcy 10 years later
In 2013, Detroit became the largest-ever U.S. city to declare bankruptcy.