Like Local 3 News on Facebook:
LANSING– After conducting a thorough review of the state of Michigan’s economy and finances, Standard & Poor’s assigned the state’s AA- credit rating with an improved “positive outlook.”
S&P’s outlook improvement follows Moody’s Investors Service affirming an Aa1 credit rating with a “stable outlook” and Fitch affirming an AA rating with a “stable outlook.” The three agencies’ ratings enable the state to borrow money at a lower interest rate—saving taxpayers millions of dollars—and reflects improvements in the state’s economy and fiscal condition since the recession.
“This is good news for Michigan residents and taxpayers,” Gov. Rick Snyder said. “For the past seven years, the state has displayed fiscal discipline with seven back-to-back balanced budgets and aimed to save $1 billion in our rainy day fund. Our reinvented tax structure clearly shows Michigan’s competitive edge in the national and international markets.”
The three agencies evaluated the state’s credit rating prior to an offering of $120 million in General Obligation Environmental Program Bonds. Money from this bond sale pays for environmental, natural resource and water quality programs administered by the Michigan Department of Environmental Quality.
“I am pleased Standard & Poor’s has acknowledged the hard work and effort taken to improve the state’s financial position and economy in recent years,” State Treasurer Nick Khouri said. “It also reaffirms that we will continue to be good stewards of taxpayers’ money as the economy continues to grow and becomes more diversified.”
The S&P credit rating report stated the state of Michigan’s economy has grown for five consecutive years, indicating that its economy is more in line with U.S. cycles. Additionally, the report recognized that the state has taken action to manage its economic volatility through increasing its reserves, structurally aligning its budgets and adopting pension reforms.
Prior to the issuance of bonds, S&P, Moody’s and Fitch conducts a review of a state’s economy and finances to determine a credit rating based on finances, economic forecasts and other factors.