Salem, Ore. – Moody’s Investor Service has assigned the City of Salem an Aa2 rating with a stable outlook. This rating applies to the upcoming sale of the City’s 2026 General Obligation Bonds. This matches the rating received for the City’s 2023 bonds.
“This rating reflects the disciplined financial management and strong governance practices that help keep Salem on a stable path,” said City Manager Krishna Namburi. “Maintaining a strong credit rating allows us to access capital at lower borrowing costs and invest in the infrastructure and services our community relies on, while continuing to be good stewards of taxpayer dollars.”
Moody’s also praised the City’s financial practices. “The stable outlook reflects our expectation that the City will continue to budget conservatively, resulting in healthy reserves and liquidity,” the agency stated.
What is a Bond Rating?
A bond rating is like a credit score for cities and other large organizations. It shows how likely a city is to repay borrowed money. This rating affects the interest rates a city will pay when it issues bonds to raise money.
Rating agencies, such as Moody’s, evaluate a city’s finances based on several factors. These include the strength of the local economy, the city’s tax base, financial management, debt levels, pension obligations and governance practices.
What Does Aa2 Mean?
The Aa2 rating means Salem has a solid financial position and a stable economic base. For Fiscal Year 2026, the City expects to end the year with a positive financial outlook. This is partly due to a new local option levy approved by voters in May 2025. The levy provides funding for libraries, parks and recreation, reducing the burden on the City’s General Fund.
Salem’s economy remains strong, even though some wealth indicators are slightly below average for cities with similar ratings. As Oregon’s capital, Salem’s economy is supported by government jobs, higher education and agriculture.
The Aa2 General Obligation Unlimited Tax (GOULT) rating matches the City’s issuer rating. This reflects the City’s full faith and credit, as well as its ability to collect unlimited property taxes to secure its bonds.
Why is This Rating Important?
The Aa2 rating reflects Salem’s strong financial position and responsible management. A high bond rating allows the City to borrow money at lower interest rates, saving taxpayer dollars. This is especially important for funding public projects, such as libraries, parks, streets and infrastructure improvements.
For Salem residents, this rating shows that the City is managing its finances well and is prepared to meet its future obligations. It also highlights the City’s commitment to maintaining a stable and thriving community.
For more information about Moody’s ratings, go to www.moodys.com.
