Moody’s Says Question 2 Could Hurt Boston’s Credit Rating
The agency is warning that Yes on 2 would be “credit negative” for four cities.
Moody’s, the credit-rating agency, has come out with an eleventh hour warning about what could happen should Massachusetts voters pass Question 2, and lift the cap on the number of charter schools in the state.
Yes on 2 would be “credit negative” for Boston, Lawrence, Springfield, and Fall River, according to Nicholas Lehman, an assistant vice president at the agency, who said as much in emails obtained by the Globe.
Credit ratings are how banks determine how confident they are a city can pay back the money it borrows. A lower rating can make it more expensive for a city to take on debt. Right now, Boston’s rating from Moody’s right now is as good as it gets: Aaa.
Lehman is expected to elaborate on the issues he foresees in a preliminary report today.
Opponents of the ballot measure pounced on the news.
“An independent rating agency tells you there is going to be a substantive impact, you have to listen,” Lawrence Mayor Daniel Rivera tells the Globe, adding that the message from Moody’s is “worrisome.”
A spokeswoman for Yes on 2, Eileen O’Connor didn’t speculate on the report given that it hasn’t been released yet, but reiterated positions proponents of lifting the cap have been making all along. The opposing sides of the debate contest whether more charters would have a negative impact on public schools. Opponents of the ballot initiative say charters drain money from the rest of the school system. Proponents say they don’t.
The warning is the latest twist in a fierce, expensive battle over charters in the state—one that is probably the most contentious in Massachusetts this election season. Polling suggests the outcome next week is still a toss-up, as voters are split right down the middle on Question 2.
Moody’s is drafting a report on the impact of next week’s vote will be, regardless of the outcome, to be published after the election is over.