S&P Global Ratings assigned its 'BBB' issuer credit rating (ICR) to the City of Poughkeepsie, N.Y. The outlook is positive. The 'BBB' ICR reflects our view of the Poughkeepsie's elevated fixed costs, including elevated pension and postemployment benefits (OPEB) and its negative fund balance position, which have persisted for multiple years, capping the rating at the current level. Despite the challenges, the city has been successful in reducing its deficit position through systemic operating changes, resulting in strong budgetary performance and increasing operational liquidity, which is additionally supported by a growing tax base. Poughkeepsie's current deficit fund balance position is not the result of an operational structural imbalance, but instead stems from historical transfers to long-dated capital projects from the
