Norton to Go on House Floor to Celebrate Moody’s Aaa Rating for D.C.’s General Obligation Bonds and to Argue Congress Should Respect D.C. Budget Autonomy Law
WASHINGTON, D.C.—Congresswoman Eleanor Holmes Norton (D-DC) said she will go to the House floor when Congress returns next week to celebrate the upgrade of the District of Columbia’s general obligation (GO) bonds to Aaa by Moody’s Investors Service. Aaa is the highest possible credit rating. In its report, Moody’s wrote that “the District has exemplary fiscal governance.” This is the first time D.C. has received the highest rating from any agency.
“The District is finally being recognized in the bond markets, where it counts most, as one of the most fiscally responsible jurisdictions in the nation—for two decades now—all while operating city and many state functions,” Norton said. “This achievement is even more remarkable considering that District finances still contend with the uncertainty inherent in Congress’s authority to interfere in the District’s finances. However, the rating agencies have indicated that our success in getting the District exempted from federal government shutdowns is a credit positive, helping increase its rating. Pending statehood, the crown jewel is budget autonomy. I will be using the upgrade in the District’s bond rating to the highest level to argue for fully recognizing D.C. budget autonomy law as the best way to maintain this extraordinary upgrade in the District’s bond rating.”
In 2013, District voters passed a referendum, the Local Budget Autonomy Amendment Act (BAA), that allows D.C. to spend its local funds without congressional approval. Under the BAA, D.C.’s local budget takes effect after a congressional review period, like all other D.C. legislation. Although the BAA has been upheld in court, Congress continues to appropriate D.C.’s local funds as if the BAA does not exist. The House has also passed legislation to overturn the BAA three times, although Norton has prevented such legislation from being enacted. The rating agencies have long made clear that complete budget autonomy would improve the District’s credit profile even more. As S&P Global Ratings noted on July 3, 3018, in upgrading its rating on D.C.’s GO bonds, a mitigating factor “is the District's lack of complete budget autonomy.”
Norton has also succeeded in getting the District freed from the constraints of continuing resolutions (CR). While federal agencies must spend at last year’s level under a CR, a Norton provision allows D.C. to spend at next year’s level, allowing it to implement its budget immediately.