Moody's gives D.C. first 'A' in 14 years.(News & Numbers)

District of Columbia Mayor Anthony Williams and CFO Natwar Gandhi announced in April that Moody's Investors Service upgraded the district's general obligation bond rating by two notches, from Baal to A2, and changed the rating outlook to stable from positive. It was the first time since at least 1990 that Moody's has given the district an A rating. Last year, Fitch Ratings and Standard & Poor's upgraded the district's general obligation bonds to A- from BBB+.

"This is a profound achievement for the district government," Williams said. "Now, all of the major rating agencies have recognized the financial discipline exercised by the district's elected leadership. 1 hope that Congress will recognize our efforts by supporting greater budget and fiscal autonomy for the district."

In a news release announcing the upgrade, Moody's cited sustained improvement in the district's economy and property tax base, as well as its multi-year record of improved financial management, controls, and results, as the underlying reasons for the enhanced bond rating. Despite the above-average level of tax-supported debt and significant capital needs, the upgrade puts the District of Columbia at roughly the average level for municipal governments in the U.S.

"We note that the district's favorable financial performance trend has been assisted by the permanent shift of some program costs to the federal government, the influence of the independent chief financial officer, and specific reserve requirements that have been imposed by Congress as part of its budgetary oversight role," Moody's said in the news release. "In addition, the district's leadership have demonstrated a commitment to maintaining fiscal balance, as evidenced by timely actions taken to respond to a projected budget deficit in fiscal 2003."

The district recorded its seventh consecutive general fund operating surplus in fiscal 2003. District revenues, fueled by a strong increase in property taxes, grew by more than 5 percent over the previous year, and the district held spending to less than 3 percent growth.

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