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The last of the nation\u2019s top financial credit agencies took action Tuesday to downgrade Los Angeles\u2019 credit rating, which will almost assuredly increase the city\u2019s cost for borrowing money.<\/p>\n
City Administrative Officer Miguel Santana said Standard & Poor\u2019s downgrade stemmed from its concerns about the significant drop in tax revenues and the city\u2019s plans to draw on its reserve fund to end the year in the black.<\/p>\n
[Updated 3:50 p.m.:<\/strong> The city’s rating moved from "AA" to "AA-minus," a mark still considered to be a relatively high grade. The state of California, by contrast, is rated \u201cA-minus\u201d by S&P<\/a>.]<\/strong><\/p>\n Though Standard & Poor\u2019s acknowledged that the city had taken steps to close its budget gap — including last week’s authorization to eliminate 4,000 city workers to save as much as $300 million next fiscal year. But analysts continue to be concerned about the city\u2019s structural deficit.<\/p>\n \u201cThey want to see action,\u201d Santana said. \u201cThey want to make sure that the plan we\u2019ve laid out actually reaches fruition and is completed. … The next question they will be asking when they review us again is, did you reduce those 4,000 positions.\u201d<\/p>\n Last week, Moody\u2019s Investors Service reduced its opinion of L.A.\u2019s finances from "stable" to "negative" because city officials had delayed addressing the budget shortfall — currently $212 million — and have proposed tapping reserves to balance the books. In November, L.A.\u2019s credit was downgraded by Fitch Ratings, which determined that Mayor Antonio Villaraigosa and the City Council failed to take adequate action to address the fiscal crisis.<\/p>\n<\/p>\n Council President Eric Garcetti said the downgrade by Standard & Poor\u2019s had been expected, but he emphasized that the council and mayor also had taken swift action to address the concerns raised, including approving layoffs, adopting a three-year budget plan and taking action to replenish the city\u2019s reserve fund and balance the budget.<\/p>\n<\/p>\n — Maeve Reston and Phil Willon at Los Angeles City Hall<\/p>\n Photo: L.A. Times file of Santana<\/em><\/p>\n \nMore breaking news in L.A. Now:\u00a0<\/strong><\/p>\n Cuts coming to child care services provided by City of L.A.<\/a><\/p>\n OC jury set to decide fate of accused serial killer Rodney Alcala — for a 3rd time<\/a> Man skateboards along 405 Freeway in Orange County after his car runs out of gas<\/a><\/p>\n Decision day in L.A. on who will run 30 campuses with nearly 40,000 students<\/a><\/p>\n L.A. animal advocates hold special events for national Spay Day<\/a><\/p>\n Two storms heading to Southern California<\/a><\/p>\n Long Beach man charged with killing girlfriend with machete<\/a><\/p>\n Roller derby league launches in Long Beach<\/a><\/p>\n CHP investigates fatal big-rig accident on 710 Freeway in East L.A.<\/a><\/p>\n
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