The state of Alaska received some good news from credit rating agency Standard & Poor’s on Tuesday.
In a new report, the agency said it is taking Alaska off its watchlist for an immediate downgrade, even as it stays bear-ish on the state’s long-term financial health.
S&P, Moody’s Investors Service and Fitch Ratings are the three principal agencies used when the state borrows money for projects. When ratings are high, the state is considered a better risk and it pays less interest on that borrowing. When ratings are lowered, the state pays more interest.
In Tuesday’s report, S&P said $1.3 billion in spending vetoed by Gov. Bill Walker from this year’s state budget improved the state’s fiscal health enough to avert a downgrade in the state’s credit rating.
In a press release, the Alaska Department of Revenue declared, “Although Governor Walker’s vetoes provide additional time before the state’s reserves would be depleted, S&P will likely lower the state’s debt ratings in the absence of structural fiscal reform during the 2017 legislative session.”
