The city of Albany, which has faced critical financial woes amid unrealized revenues and a previously unannounced budget deficit, has had its credit rating downgraded.
S&P Global Ratings on Wednesday lowered the city’s long-term rating to A from A+ with a negative outlook.
“The downgrade and negative outlook reflect our view of the city’s reduced financial flexibility following its large, anticipated drawdowns in fiscal years 2025 and 2026 and its already thin available general fund reserves,” the report states.
It takes note of the additional state aid Albany received in May, but states the city “has depleted its fund balance, limiting its ability to respond to current and future operating pressures.”
S&P warned it could further lower the rating if the city does not take action to address its deficit and balance its finances. The rating could improve through recurring revenue enhancement or reductions in expenses, it stated.
Spectrum News 1 has reached out to the city for comment.
Earlier this week, Mayor Dorcey Applyrs warned the city’s credit rating was under review.
“Albany is not alone in facing heightened credit scrutiny; S&P has recently downgraded other New York State municipalities reflecting broader concerns around reserves, structural balance, financial flexibility, and long-term fiscal management,” she said in a statement. “While that assessment reflects conditions that developed before my Administration took office, we believe the actions implemented during the past six months have positioned the City on a stronger path toward long-term fiscal stability.”
Applyrs, who served as city auditor in the city’s prior administration, said earlier this year that she had found double-digit deficits in fiscal years 2025 and 2026.
The S&P downgrade was first reported by the Times Union.