S&P Global Ratings lowered its long-term rating on Laurel Highlands School District, Pa.'s outstanding general obligation (GO) debt to 'A-' from 'A'. The outlook is negative. The downgrade reflects two consecutive draws on general fund reserves and further declines projected over fiscal years 2016 and 2017 that will completely deplete general fund reserves. The negative outlook reflects the potential that budgetary results will remain weak, further reducing liquidity. If budgetary performance remains imbalanced, we could lower the rating further over our outlook horizon. The district's full-faith-and-credit GO pledge secures the bonds. The Act 1 Index under Pennsylvania state statute restricts a district's ability to raise the tax levy above a certain index, which is determined by the Pennsylvania Department of
