JUNEAU— Governor Bill Walker reacted to Standard & Poor’s (S&P) announcement today that Alaska’s credit ratings are being placed on negative CreditWatch. The report cites the lack of a budget for fiscal year 2018, continued reliance on savings to pay for government services, and a lack of new revenues as reasons for the negative outlook. The move means Alaska’s AA+ general obligation (GO) bond rating is in danger of being lowered yet again if a complete fiscal plan is not adopted this year.
“Today’s announcement from S&P is both concerning and disappointing—but not surprising,” Governor Walker said. “The agency’s analysts note that we are continuing to drain our savings at an alarming rate, and have not yet enacted a fiscal plan. It is critical that we pass an operating budget for next year, and adopt a fiscal plan that does not continue our over-reliance on savings. I remain hopeful that we will be able to pull together and pass a budget and complete fiscal plan to secure Alaska’s future, and demonstrate that we take our finances and budget issues seriously. Alaskans are depending on us.”
Much like a credit score affects an individual’s ability to buy a house or car, the ratings from S&P and other agencies impact the state’s ability to build a stronger Alaska through infrastructure and other capital projects. The negative CreditWatch indicates that S&P is concerned about Alaska’s fiscal stability, and if the ratings are lowered, could cost the state millions of dollars in additional interest payments.
S&P’s announcement comes days after Governor Walker called the 30th Legislature into its second special session to focus initially on passing an operating budget so that government services can continue past July 1 of this year. In addition to the GO bond, S&P also placed Alaska’s AA appropriation rating and A+ moral obligation rating on negative CreditWatch.
The S&P Analysis of Alaska’s credit rating can be read here.[PDF]
Source: State of Alaska[xyz-ihs snippet=”Adsense-responsive”]
