Two top global credit-rating agencies, Fitch Ratings and Standard & Poor's, have this week reaffirmed Missouri's AAA credit rating, Gov. Jay Nixon announced today. The ratings, which apply to general obligation bonds issued by the state, help keep borrowing rates low for school districts, local governments, and public bodies that borrow money to undertake major projects. Lower interest rates save taxpayers millions of dollars a year. The flexibility provided by Missouri's fully funded budget reserves contributed to the top rating.
"Our top AAA credit rating saves taxpayers millions in interest and demonstrates to businesses around the world that Missouri is a safe place to grow and invest," Gov. Nixon said. "These strong ratings are a testament to our strong record of fiscal discipline, and they reinforce the need to continue to manage the state budget in a fiscally responsible way."
In issuing the AAA rating, Fitch Ratings cited the Governor's prudent financial management and his constitutional authority to withhold funds to maintain a balanced budget. Fitch wrote, "The state's financial flexibility and liquidity position remain healthy, supported by strong revenue performance this year and reserves that remained fully funded throughout the recession"; and that the rating "reflects a low debt burden, historically conservative financial operations, and a broad and diverse economy."
The report from Standard & Poor's noted the Governor's rescission authority to cure budget imbalances and also said, "We believe that the strength of the budget management and government framework has allowed the state to maintain reserve and liquidity levels that are consistent with a 'AAA' rating."
Last week, a third top global credit-rating agency, Moody's, said that "executive control over appropriated funds is central to (the) state's strong fiscal management" and also cited Missouri's "history of excellent financial performance and sound reserve levels, strong fiscal management controls, and the state's moderate debt burden." Missouri's general obligation debt also has been rated AAA by Moody's.