25-1535 : S & P Global Ratings Report for Buffalo NY Sep-8-2025

S&P Global Ratings has revised Buffalo, NY's General Obligation (GO) debt outlook from stable to negative, while affirming its 'A+' long-term rating. This revision is due to the city's financial pressures and a significant drawdown of reserves in fiscal year 2024, which reduced financial flexibility. The city faces a projected budget gap of over $50 million in fiscal year 2026, despite measures like an 8% tax levy increase and a new hotel occupancy tax. A plan to sell city-owned parking facilities to a newly formed parking authority for an estimated $45 million is also in progress, but its timing and final price are uncertain.

Key Concerns:

• Reserve Drawdown: A $31.6 million reduction in available reserves in fiscal 2024, largely due to a significant increase in personal injury claim settlements.
• Budget Gap: A projected $50+ million budget gap for fiscal 2026 as federal stimulus funds (ARPA) are phased out.
• OPEB Liability: A substantial $1.2 billion Other Postemployment Benefits (OPEB) liability continues to be a long-term budgetary pressure.
• Implementation Risk: Uncertainty surrounding the parking authority sale and its ability to generate the expected one-time revenue.

S&P indicates there is at least a one-in-three chance of a downgrade if the city fails to restore balanced financial operations and maintain adequate reserves.