Arizona's credit posture dims from ruling on school aid

Thursday, July 31, 2014

A recent court ruling that resets education spending in Arizona will hurt the state's creditworthiness a bit but could improve that of various school districts.

Moody's Investors Service, a bond-rating agency, didn't announce any upgrades or downgrades as a result of a Superior Court ruling earlier this month that requires the state to increase school funding by $317 million, starting this fall.

But in a report, Moody's said the court decision, which it expects to be upheld, will force Arizona to make cuts in other programs to afford the additional money heading to school districts. The amount equals 2 percent of the state's general fund and 7 percent of its education expenses, Moody's said.

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