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U.S. Local Governments Credit Brief: Pennsylvania Counties And Municipalities Means And Medians


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U.S. Local Governments Credit Brief: Pennsylvania Counties And Municipalities Means And Medians


Pennsylvania counties and municipalities are generally well positioned to manage economic headwinds that include inflationary pressures, rising interest rates, and an expected shallow recession in 2023. (For more information on S&P Global Ratings' economic forecast, see "Economic Outlook U.S. Q1 2023: Tipping Toward Recession," published Nov. 28, 2022, on RatingsDirect.) Local governments across the commonwealth are emerging from the COVID-19 pandemic, having benefited from modest revenue recovery and federal stimulus funding that have bolstered reserves. S&P Global Ratings expects that healthy reserves and proactive budgetary management will allow Pennsylvania local governments to weather a potential economic downturn and preserve credit quality across the portfolio.

S&P Global Ratings maintains ratings on 245 municipalities and 39 counties. Overall, the credit quality of municipalities and counties in the commonwealth remains stable, with 3.9% experiencing rating changes in calendar 2022. Over that span, three municipalities and three counties had upgrades on general obligation bonds, and five municipalities had downgrades. Currently, 94.4% of the ratings have a stable outlook, 3.9% have a negative outlook, and 1.7% have a positive outlook.

What We're Watching

Most governments in Pennsylvania are well positioned to face economic headwinds

Economic recovery from the pandemic has helped sustain property wealth and income levels across the commonwealth, and has stabilized local revenue for municipalities and counties. The commonwealth has a diverse economic landscape, with wealthier and higher-rated credits typically concentrated in the large metro regions, and with smaller cities and rural areas, which tend to be weaker economically and lower-rated, interspersed throughout the rest of commonwealth. A shallow recession in 2023 could disrupt this period of economic recovery, though we expect larger, more economically diverse areas of the commonwealth will remain fairly stable. In our view, local governments with more limited economies could experience more credit pressure.

Modest revenue growth and federal stimulus funding have helped Pennsylvania local governments remain fiscally stable, with about 70% of the rated universe reporting positive general fund operating results in the most recent audited year (which, for most, is fiscal 2021). That said, a spend-down of federal funding, coinciding with macroeconomic stress, could lead to some fiscal pressure in the next few years. Therefore, we expect management teams to make budget adjustments to maintain fiscal stability and healthy reserves.

Debt and pension liabilities remain manageable for most Pennsylvania counties and municipalities. In addition to American Rescue Plan Act funding, money from the Infrastructure Investment and Jobs Act and Inflation Reduction Act should help local governments address a portion of their capital and infrastructure needs. However, aging infrastructure across the commonwealth will still likely lead to higher debt loads over the longer term. Furthermore, rising interest rates will also likely consume a greater proportion of local governments' budgets.

Most local governments administer single-employer uniform and non-uniform pension plans. Funded status varies by municipality but most plans are fairly well funded, so pension costs are not a stress for most local governments, though we expect market losses in 2022 will likely weaken funded ratios. Poorly funded pensions are a pressure for some local governments, and we believe that weaker demographic trends could exacerbate this. A prime example is the City of Chester (unrated), which recently filed for bankruptcy, partly as a result of a severely underfunded pension system. For more information on Pennsylvania pensions, see "Pension Spotlight: Pennsylvania," published July 19, 2022.

Infrequent real estate assessments are a factor in tax-raising limitations

Pennsylvania does not have a formal, statewide property tax assessment process, leaving counties to reassess their property as they see fit. This has resulted in some counties going more than 30 years since their latest reassessment, which in turn is a contributing factor to lower market and assessed values, which can then limit tax-raising abilities.

Infrequent assessments are one of several factors that might limit a local government's revenue raising ability. For example, most local governments are also subject to state-imposed property tax rate maximums, although most counties and municipalities are well below the cap. And for many local governments, the local school district also relies on property taxes to fund education and usually levies a higher millage rate, resulting in municipalities cautiously approaching raising property taxes. Furthermore, most municipalities that levy the EIT are at the legal maximum, further limiting revenue flexibility. Therefore, management of property tax rates and control of expenditures will continue to be important factors in maintaining short- and long-term financial stability for counties and municipalities across the commonwealth.

Spotlight On Environment, Social, And Governance Credit Factors


We view Pennsylvania local governments' physical risks as neutral, but we believe some counties and municipalities face some increased exposure from inland flooding hazards. In our opinion, most local governments' exposure to social capital risks is also neutral, but in some cases it could be a negative credit factor for those with rapidly aging and declining populations. While most individual counties and municipalities' governance structure is neutral, prolonged budget impasses have sometimes adversely affected counties' revenue from the state, most recently in fiscal 2016. However, the change in the state's leadership, including a split legislature, may lead to a return of this risk. On the other hand, Pennsylvania has positive governance structure aspects, including the Municipalities Financial Recovery Act, which the Department of Community and Economic Development oversees, providing state fiscal oversight for counties and municipalities. Finally, the commonwealth allows for municipalities to declare bankruptcy, and while such an occurrence is uncommon, we will monitor any filings in Pennsylvania, including Chester, because of the potential impact on other issuers.

Table 1

Pennsylvania Counties: Medians
Projected per capita EBI (%) 135 117 92 108 76 76 80
Market value per capita ($) 150,079 83,590 72,685 81,818 48,315 46,934 55,563
Available general fund (%) 48 41 39 12 41 17 24
General fund performance (%) (0.2) 1.5 1.5 4.1 7.0 8.7 4.8
Cash and expense (%) 39 30 27 25 46 38 40
Carrying charge (%) 6.8 3.4 3.9 2.6 6.0 4.3 6.5
Pension ARC + OPEB as % expense 1.7 3.0 2.8 4.4 4.2 1.6 3.3
ARC--Annual required contribution. EBI--Effective buying income. OPEB--Other postemployment benefits.

Table 2

Pennsylvania Municipalities: Medians
AAA AA+ AA AA- A+ A A- BBB+ or lower
Projected per capita EBI (%) 178 167 122 98 85 81 76 68
Market value per capita ($) 154,505 133,001 89,880 70,392 50,655 42,058 35,956 31,558
Available general fund (%) 62 54 45 55 53 41 47 15
General fund performance (%) 6.9 7.8 4.6 4.7 8.6 4.6 10.6 (1.2)
Cash and expense (%) 113 152 90 93 101 75 75 28
Carrying charge (%) 6.6 6.7 6.6 5.9 7.4 6.3 7.5 12.3
Pension ARC + OPEB as % expense 5.6 3.2 5.6 5.7 6.4 7.5 10.6 6.1
ARC--Annual required contribution. EBI--Effective buying income. OPEB--Other postemployment benefits.

Chart 1


Chart 2


Table 3

Pennsylvania Counties: Financial Management Assessment
Score (%)
Strong 67 0 0 0 0 0 0
Good 33 100 38 33 0 0 0
Standard 0 0 63 67 100 100 86
Vulnerable 0 0 0 0 0 0 14

Table 4

Pennsylvania Municipalities: Financial Management Assessment
AAA AA+ AA AA- A+ A A- BBB+ or lower
Score (%)
Strong 25 0 0 4 0 0 0 0
Good 25 43 30 11 11 7 33 0
Standard 50 57 70 85 89 79 17 27
Vulnerable 0 0 0 0 0 14 50 73

Table 5

Pennsylvania Municipalities--Ratings List
This list was prepared by individuals on behalf of the USPF Group of S&P Global Ratings and is current as of Feb. 3, 2023. For the most up-to-date, accurate, and complete information on any credit ratings referenced in this list, please visit
As of Feb. 3, 2023
Entity Rating Outlook
Albion Borough A Stable
Allegheny Township (Westmoreland County) AA- Stable
Allentown A Stable
Altoona A Stable
Ambler Boro AA Stable
Ambridge Boro A Stable
Aston Twp AA- Stable
Baden Boro A Stable
Baldwin Boro A+ Stable
Beaver Falls BB+ Positive
Bell Acres Boro AA Stable
Bethel Pk Municipality AA Stable
Bethlehem AA- Stable
Blair Twp A+ Stable
Bonneauville Boro A Stable
Borough of East Pittsburgh A Stable
Brackenridge Boro BBB Stable
Brentwood Borough AA- Stable
Brookhaven Boro AA- Stable
Buckingham Twp (Bucks Cnty) AAA Stable
Butler B Stable
Caln Twp AA Stable
Carnegie Boro A- Stable
Castle Shannon Boro A+ Negative
Catasauqua Boro BB+ Negative
Center Twp (Beaver Cnty) A+ Stable
Charlestown Twp AA- Negative
Chartiers Twp AA- Stable
Collier Twp AA+ Stable
Columbia Boro AA- Stable
Conemaugh Twp A+ Stable
Coolspring Township AA Stable
Coraopolis Boro A+ Stable
Crafton Borough AA- Stable
Cumru Twp AA Stable
Derry Twp (Dauphin Cnty) AA Stable
Derry Twp (Westmoreland Cnty) A- Stable
Dover Twp (York Cnty) AA- Stable
Dunmore Boro BBB+ Stable
East Bradford Twp AA Stable
East Marlborough Twp AA+ Stable
East Pennsboro Twp AA- Stable
East Vincent Twp AA Stable
Easton A Stable
Easttown Twp AA+ Stable
Elizabethtown Boro A+ Stable
Emmaus Boro AA- Stable
Ephrata Boro AA- Stable
Erie A Stable
Etna Boro AA- Stable
Evans City A Stable
Exeter Twp (Berks Cnty) AA- Stable
Findlay Twp AA Stable
Forest Hills Borough AA Stable
Fox Chapel AA+ Stable
Franconia Twp AA- Stable
Franklin Pk Boro AA Stable
Franklin Twp (Greene Cnty) AA- Stable
Gettysburg A+ Stable
Glenolden Boro A+ Negative
Granville Twp A+ Stable
Green Tree Boro AA+ Stable
Greensburg AA Stable
Greenville Boro A Stable
Hamburg Boro A+ Stable
Hampden Twp AA Stable
Hampton Twp AA Stable
Hanover Boro AA- Stable
Harmony Twp A Stable
Hazle Twp A Stable
Heidelberg Twp AA- Stable
Hermitage AA- Stable
Highspire Boro A+ Stable
Honey Brook Township AA- Stable
Hopewell Twp (Beaver Cnty) AA Stable
Hummelstown Boro AA- Stable
Huntingdon Boro A Stable
Indiana Twp A+ Stable
Jackson Twp (Mercer Cnty) A Stable
Jackson Twp (York Cnty) AA- Stable
Kennett Square Boro AA- Stable
Kingston AA- Stable
Lansdale Boro AA- Stable
Latrobe AA- Stable
Lebanon A+ Stable
Leetsdale Boro A+ Stable
Lewistown Boro A+ Stable
Lititz Boro AA Stable
Littlestown Boro A+ Stable
London Grove Township AA Stable
Lower Burrell A+ Stable
Lower Heidelberg Twp AA- Positive
Lower Merion Twp AAA Stable
Lower Moreland Twp AA+ Stable
Lower Oxford Twp AA Stable
Lower Pottsgrove Twp AA Stable
Lower Southampton AA+ Stable
Lower Swatara Twp AA Stable
Manheim Borough AA- Stable
Manheim Twp AAA Stable
Marple Twp AA Stable
Mckees Rocks Boro A Stable
Meadville A+ Stable
Mechanicsburg Boro AA- Stable
Menallen Twp A Stable
Mercer Boro A Stable
Middle Smithfield Twp AA- Stable
Middletown Twp (Delaware Cnty) AA Stable
Milford Twp AA+ Stable
Monaca Boro A+ Stable
Monroe Twp (Cumberland Cnty) AA Stable
Montgomery Twp AAA Stable
Moon Twp AA Stable
Mount Joy Boro AA- Stable
Muhlenberg Twp AA Stable
Munhall Borough A Negative
Murrysville AA+ Stable
New Castle A- Stable
New Wilmington Boro A Stable
Newberry Twp AA- Stable
Norristown A+ Stable
North Coventry Twp AA Stable
North Fayette Twp AA Stable
North Franklin Twp A+ Stable
North Londonderry Twp AA Stable
North Sewickley Twp A+ Stable
North Strabane Twp AA- Stable
North Versailles Twp AA- Stable
Oakmont Boro AA- Stable
Ohio Twp AA Stable
Ontelaunee Twp AA- Stable
Orwigsburg Boro A+ Stable
Palmer Twp AA Stable
Palmyra Boro A+ Stable
Pen Argyl Boro A+ Stable
Penn Hills Municipality A+ Stable
Penn Twp (York Cnty) AA- Stable
Peters Twp AA+ Stable
Philadelphia A Stable
Phoenixville Boro AA Stable
Pitcairn Boro A- Stable
Pittsburgh AA- Stable
Pleasant Hills Auth A+ Stable
Pleasant Hills Boro AA- Stable
Plum Boro AA Stable
Plumstead Twp AA Stable
Pottstown Boro AA Stable
Pottsville A+ Stable
Quincy Twp A+ Stable
Reading A- Stable
Richland Boro A- Stable
Richland Twp (Allegheny Cnty) AA Stable
Richland Twp (Bucks Cnty) AA Stable
Ridley Twp AA- Stable
Roaring Spring Boro A+ Stable
Robinson Twp (Allegheny Cnty) AA Stable
Rochester (Boro of) A Stable
Rochester Twp A+ Stable
Ross Twp AA Stable
Rostraver Twp AA- Stable
Sandycreek Twp A+ Stable
Schuylkill Haven Boro A+ Stable
Scott Twp AA- Stable
Scott Twp (Lackawanna Cnty) A+ Stable
Scranton BB+ Positive
Sewickley Boro AA- Stable
Sharon A Stable
Smithfield Twp AA- Stable
South Fayette Twp AA Stable
South Park Twp AA Stable
South Strabane Twp AA Stable
South Williamsport Borough AA- Stable
Spring Grove Boro A Stable
Springdale Boro A+ Stable
Springettsbury Twp AA- Stable
Springfield Twp (Bucks Cnty) AA Stable
St Marys A+ Stable
St Thomas Twp A+ Stable
State College Boro AA- Stable
Stockertown Borough A+ Stable
Stowe Twp A+ Stable
Strasburg Boro A+ Stable
Susquehanna Twp AA Stable
Swatara Twp (Dauphin Cnty) AA- Stable
Tamaqua Boro BBB+ Stable
Tarentum Boro BBB- Stable
Township of Towamencin AA Stable
Trafford Boro A Stable
Unity Twp AA- Stable
Upper Allen Township AA Stable
Upper Chichester Twp AA- Stable
Upper Darby Twp A Negative
Upper Providence Twp AA- Stable
Upper St Clair Twp AA+ Stable
Walnutport Boro BBB Stable
Warminster Twp A Stable
Washington BBB+ Stable
Washington Township (Westmoreland County) A Stable
West Chester Boro AA- Negative
West Cocalico Township AA Stable
West Earl Twp AA Stable
West Goshen Twp AA+ Stable
West Mifflin Boro A+ Stable
West Pikeland Twp AA+ Stable
West Reading Boro A+ Stable
West View Boro A+ Stable
Western Westmoreland Mun Auth AA- Stable
White Oak Boro AA- Stable
Whitehall Twp AA Stable
Wilkes-Barre BBB- Stable
Wilkes-Barre Twp AA- Stable
Wilkinsburg Boro A Stable
Worcester Twp AA+ Stable
Wysox Twp A+ Stable
Yardley Boro AA Stable
Youngwood Borough A+ Stable
Zelienople Boro A Stable

Table 6

Pennsylvania Counties--Ratings List
This list was prepared by individuals on behalf of the USPF Group of S&P Global Ratings and is current as of Feb. 3, 2023. For the most up-to-date, accurate, and complete information on any credit ratings referenced in this list, please visit
As of Feb. 3, 2023
Entity Rating Outlook
Allegheny Cnty AA- Stable
Armstrong Cnty A+ Stable
Beaver Cnty A- Positive
Bucks County AAA Stable
Butler Cnty AA- Stable
Cambria Cnty A- Positive
Carbon Cnty AA Stable
Centre Cnty AA Stable
Chester Cnty AAA Stable
Clinton Cnty A+ Stable
Columbia Cnty A- Stable
Cumberland Cnty AAA Stable
Dauphin Cnty AA Stable
Delaware Cnty AA+ Stable
Erie Cnty AA Stable
Fayette Cnty A- Stable
Franklin Cnty AA Stable
Greene Cnty A Negative
Indiana Cnty A Stable
Jefferson Cnty A+ Stable
Lackawanna Cnty A- Negative
Lawrence Cnty A- Stable
Luzerne Cnty A- Stable
Lycoming Cnty A+ Stable
McKean Cnty A Stable
Mercer Cnty A+ Stable
Mifflin Cnty A+ Stable
Northampton Cnty AA Stable
Northumberland Cnty A Stable
Pike Cnty AA- Stable
Washington Cnty AA Stable
Wayne Cnty A Stable
York Cnty AA Stable

This report does not constitute a rating action.

Primary Credit Analyst:Benjamin D Gallovic, Chicago + 1 (312) 233 7070;
Secondary Contact:Bobby E Otter, Toronto 1-647-480-3517;

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