By Kolby R. LaMarche

Last week, Moody’s Investors Service upgraded Burlington’s general obligation credit rating from AA3 to AA2, its strongest in 16 years. The move, announced on Oct. 31, affirms Burlington’s transformation from a near-bankrupt municipality teetering on junk-bond status to Vermont’s fiscal pacesetter, with lower borrowing costs poised to support current and future city projects.

The upgrade arrives amid a robust economic snapshot. From fiscal 2023 to 2024, Burlington’s revenues swelled by nearly $12 million, outpacing expenses, while outstanding debt shrank by $6 million. Moody’s report praised the city’s “strong financial health,” citing a growing tax base anchored by the University of Vermont, the medical hub at UVM Medical Center, and a diversifying economy that includes tech startups and tourism. 

Reserves now exceed 20% of operating revenues, a buffer built through – the city says – disciplined budgeting and voter-approved bonds. 

“This reflects our commitment to structurally balanced budgets,” Mayor Emma Mulvaney-Stanak said in a statement released Thursday. Elected in 2024 as Burlington’s first female mayor, Mulvaney-Stanak, a former state representative and progressive stalwart, has steered the city through post-pandemic recovery and crime crisis. 

The AA2 rating also nods to broader Burlington resilience: unemployment is hovering at 2.8%, below the national average, and property values have climbed 15% since 2022, swelling the grand list to $12.5 billion.

But this milestone isn’t born in isolation. It’s the latest chapter in a redemption arc that began in the ashes of one of New England’s most notorious municipal messes: 2007, when Burlington Telecom (BT), the city’s municipally owned broadband provider, was a darling of progressive innovation—a bid to wire the city for the digital age under then-Mayor Bob Kiss. 

Kiss, a self-styled populist who defeated Democrat Hinda Miller 2006, envisioned BT as a tool for equity, offering low-cost internet to underserved neighborhoods. 

Instead, it became a sinkhole. By 2010, revelations emerged that city funds—$17 million in taxpayer dollars—had been improperly diverted to prop up BT’s losses, hidden through off-books loans and accounting sleight-of-hand. 

The fallout was swift and severe: Moody’s slashed Burlington’s rating six notches from Aa3 in 2009 to Baa3 by June 2012, a negative-outlook grade that flirted with junk status. 

Interest rates on bonds spiked, pension obligations ballooned to 80% funded, and short-term borrowing became a crutch, with the city owing $20 million in notes by 2013. Kiss opted not to run for a third term, leaving a $40 million BT albatross and a city council fractured by blame.

Enter Miro Weinberger, Democrat and former business executive who swept into office in April 2012 on a single, stark pledge: fiscal salvation. “Restoring the City’s fiscal health would be my top priority,” he declared on City Hall steps during his campaign. 

Weinberger, who served three terms until 2024, inherited a mess but methodically tried to dismantled it. His first win came in November 2012, when voters approved a $9 million Fiscal Stability Bond to retire high-interest notes, averting a cash crunch. 

By April 2014, Moody’s bumped the rating to A1, crediting early surpluses and reserve builds. 

In March 2016, another two-step jump to A3, with stable outlook, as four years of operating surpluses pushed reserves above 10%. 

The crown jewel arrived in July 2019, when the city took a two-notch leap to Aa3, restoring pre-BT glory and unlocking $1 million in immediate bond savings. 

Key to this was the March 2019 sale of BT to a Connecticut consortium for $89 million, resolving a $33.5 million Citibank lawsuit and erasing $26 million in liabilities. Moody’s lauded the “experienced management team” for conservative policies, noting Burlington’s role as Vermont’s economic engine—home to 25,000 jobs and $4 billion in annual output. 

Under Weinberger, debt service stabilized at 8-10% of revenues, pensions climbed to 75% funded, and capital projects—from the $30 million LED streetlight retrofit to waterfront revitalizations—proceeded without tax hikes exceeding 2% annually. 

By 2020, amid COVID shocks, the Aa3 held firm, with federal aid and a 5% revenue rebound in 2021 cushioning blows.

Weinberger’s era wasn’t flawless, however. Critics, including progressives on the council, chafed at austerity measures that deferred maintenance on public infrastructure and slowed affordable units amid a dangerously low vacancy rate.