Erie County Comptroller Mark C. Poloncarz announced that Erie County received a significant three-step increase to its credit rating from noted Wall Street rating agency Moody’s. Moody’s recalibrated the County’s underlying credit rating from Baa2 to A2 on April 16, 2010.

The upgrade is part of Moody’s recalibration of its municipal ratings to its global rating scale. As described by Moody’s in its March 16, 2010 announcement of the recalibration process, the recalibration of municipal ratings “will enhance the comparability of ratings across the Moody’s-rated universe. Historically, Moody’s municipal ratings have been calibrated on a separate rating scale that emphasizes the ordinal ranking of credit risk within the municipal sector only and measures distance to distress. Upon recalibration Moody’s will maintain a single global scale rating system for municipal issuers, and we will no longer assign municipal scale ratings to municipal obligations.”

“I am delighted to report this positive news to the taxpayers of Erie County. For many years, rating agencies penalized municipalities by lowering their credit rating compared to the private sector even though municipalities very rarely defaulted on their debts, unlike many private sector entities. This recalibration will save all local taxpayers money in that the County, as well as other local municipalities, will be able to obtain better interest rates, thereby resulting in less cost in the long run. I commend Moody’s for righting a decades-long wrong that cost taxpayers through higher interest rates and fees,” stated Poloncarz.

The Comptroller noted that as a result of the recalibration, the County’s credit rating is not only in the “A” category but is much closer to that of the Erie County Fiscal Stability Authority (“ECFSA”), which was recalibrated upward only one step. The County’s underlying rating (A2) in now within four steps of the ECFSA’s rating (Aa1), whereas it was six steps lower beforehand (Baa2 compared to Aa2).

Finally, Wall Street rating agency Fitch Ratings has indicated that it will also likely recalibrate the County’s credit rating to the “A” category by the end of April.