Moody’s Investor Services announced it revised Oklahoma’s bond rating outlook from negative to stable.
Governor Fallin Thursday said lawmakers approving an historic revenue package along with the state’s improving economy helped upgrade Oklahoma’s bond rating outlook.
“Moody’s upgrading Oklahoma’s bond rating outlook is terrific news for our state,” said Fallin. “This reflects our growing state economy, improved budgeting practices, and below-average debt burden. Most importantly, lawmakers approved and I signed a revenue package this year that provides a long-term solution to multi-year budget deficits caused by an energy downturn, and helps reduce the reliance on one-time funds. Finding new revenue is very tough, made even more difficult because revenue-raising measures require three-fourths votes to pass. The budget approved this year helps set us on a path to long-term sustainability and stability by making more recurring revenue available. Our economic pro-business policies are diversifying our economy and bringing in a large amount of new jobs, as seen by our unemployment rate dropping to 3.7 percent.
“Our budget solutions along with our improving economy also allowed us to replenish the state’s savings account, which also is a factor considered by Moody’s. Last month we deposited $370 million into the Rainy Day Fund, which brings the balance to about $451 million – a far cry from the $2.03 that was in it when I became governor.”
Moody’s said the stable outlook for Oklahoma reflects an expectation of modest economic growth, despite continued reliance on the oil and gas sector, and the stabilization of the state’s finances driven by recent growth. The replenishment of the Rainy Day Fund will help cushion the state from fiscal pressure during the next economic downturn, it said.
“The revised rating outlook from Moody’s shows when politically difficult steps are taken to improve budget stability, those actions are recognized and positively impact overall state finances,” state Treasurer Ken Miller said. “It is my hope this mindset at the Capitol will endure so our finances can be sound during both economic expansions and contractions.”
Moody’s in November lowered the state’s outlook to negative after legislators failed to reach any long-term revenue measures.
In March, the governor signed three bills that were part of an historic revenue package to fund pay raises for teachers, which was part of the largest appropriation to K-12 public education in state history.
“The rating agencies are very thorough and methodical when they consider changing a state’s rating outlook,” said State Bond Advisor Andrew Messer. “Improvements in the economy and budgeting practices were instrumental in making the case for this upward adjustment.”
