The downgrade to A1 from Aa3 reflects a vulnerable economic profile indicated by a local labor market struggling to recover recessionary losses, according to Moody's. However, this is balanced by a moderate debt burden and healthy financial position. Explore MORE: Butler County bond refinancing to net $800,000-plus savings Middletown's credit strengths include a healthy financial position, with total liquidity providing a satisfactory cushion to the city's dependence on local income taxes, according to the Moody's report. Draft 2016 figures indicate a $600,000 increase to available fund balance, a key driver of the positive result is the continued growth in local income taxes.