Philadelphia has seven days of cash, Moody's is unhappy

Billy Pen: Moody’s announced Tuesday it was downgrading the city’s outlook from a Stable to Negative. This change indicates a greater possibility Philadelphia’s credit rating could decline. Right now, the city holds an A2 credit rating — already low compared to peer cities. A drop in credit rating means Philly would have to borrow money at a higher interest rate. The higher interest rate falls back to us regular citizens. If a city has to pay more to borrow money, it would need to cut back on city services or increase taxes.
Why did Moody’s move its outlook on Philly to Negative? In large part because of its low reserve levels right now and the city’s projection its general fund balance will fall farther, to that 1 percent level.