The credit ratings and research firm Moody's has dropped the outlook of the City of Buffalo from "stable" to "negative" while affirming Buffalo's Issuer Rating at "A1," the Buffalo Comptroller's office said Monday.
The report cites "ongoing fiscal pressures, declining reserves, and continued reliance on one-time revenues to maintain budgetary balance," for the decision, the release said.
Buffalo's reserves dropped by $14.5 million in Fiscal Year 2025, the report said, which signifies a significant decreased compared to similarly rated municipalities.
“Moody’s revision to a Negative outlook reinforces the serious fiscal challenges facing the City of Buffalo,” said City Comptroller Barbara Miller Williams in the release. "While we continue to see economic growth and improvements in certain financial practices, the ongoing depletion of reserves, failure to generate new recurring revenues, and reliance on one-time monetary assistance remains a critical concern. Immediate and sustained action is necessary to restore structural balance, rebuild reserves, and ensure long-term financial stability for the City.”
According to Moody's, Buffalo holds regional importance and boasts a growing local economy. However, "rising expenditures, combined with stagnant growth in recurring revenues, have resulted in continued reliance on one-time measures to close budget gaps."
The report also noted that the Buffalo Board of Education holds stronger reserves than the city but it, too, projects to face significant budget gaps in the coming years.