It also blamed the downgrade on the county's weakened cash position, its habit of using reserve funds to balance the general fund from 2008 to 2010, and a past pattern of not making its annual pension contribution.
Josh Shapiro, chair of the county board of commissioners, said that despite the downgrade, he was encouraged by the fact that "Moody's has obviously studied our actions from the day we took office, and those actions have led to the change in outlook from negative to stable.
"It is clear," Shapiro said, "that the downgrade is a reflection of what took place in this county's government before January of 2012, and the change in outlook is a barometer of what Moody's believes will happen in the future."
Moody's did praise the previous administration's decision to raise revenue last year through a 17.5 percent tax increase, but noted that on taking office in 2012, the new administration was socked by a $10 million budget gap.
In general, though, Moody's expressed confidence in the new administration's fiscal plans and policies. Those include staff cuts, adoption of zero-based budgeting, revisions to the bidding process, tighter cash control, and plans to replenish the county's reserve.
"We are on the road to recovery," Shapiro said. "Moody's obviously likes the route we have taken so far, and we are committed to finishing the journey that will put Montgomery County's finances back on solid ground."
Contact Bonnie L. Cook at 610-313-8232 or bcook@phillynews.com.
