Moody’s Investor Service has continued the city of Madison’s Aaa bond rating with a stable outlook. This is the highest possible rating and reflects the city’s strong and diverse economy. Madison has had a triple-A rating on its general obligation debt since 1973.
Strengths for the city include a large, diverse tax base that serves as an economic hub, along with a solid financial position supported by prudent management. Credit challenges to the city include state-imposed property tax limits. Factors identified that could lead to a downgrade include a material narrowing of available fund balance.
Based on Moody’s analytic framework, Madison has low exposure to environmental, social, and governance risks that could negatively impact credit ratings. Moody’s cites the city’s Sustainability Plan, health insurance coverage rate of its residents, overall demographics and educational attainment levels, access to basic services, conservative budgetary approach, multiyear capital planning, and maintaining operating reserves in compliance with the city’s formal fund balance policy, as key reasons for maintaining Madison’s credit rating.
