Standard and Poor’s has lowered Oklahoma’s debt ratings. The state’s general obligation bonds and appropriation debt backed by the state’s credit enhancement reserve fund were lowered one notch from “AA+” to “AA.” S&P also lowered the state’s appropriation debt to “AA-“ from “AA.” The credit rating firm said the outlook for Oklahoma’s debt is stable.
According to S&P’s report on the ratings change, the downgrade is due to the persistently weak revenue collections, leading to the declared revenue failure this year. It believes the state’s financial position has deteriorated to the point that further precludes the state from building up its reserves and exposes it to an increased vulnerability to broad regional or national economic weakness. The report also states that if no revenue structural changes occur, a recovery in the economy and revenues will be needed for S&P to consider raising the credit ratings.
“This report highlights several things that we’ve been saying for some time now,” said Secretary of Finance, Administration and Information Technology Preston L. Doerflinger. “We need to fix the structural budget deficit and our revenue problem.”
