Two national ratings agencies downgraded the “outlook” for Washington state finances to “negative” last week.
Whatever the impact, the uncertainty did not get in the way of the state’s record $978 million bond refinancing this morning. State Treasurer Jim McIntire’s office says the sale saves taxpayers $154 million, about $15 million of that in the current biennium.
McIntire also called it the “largest tax exempt competitive bond sale” in the country since the September 2008 financial crisis.
The treasurer also said the downgraded outlook by two of three ratings agencies still leaves state’s double-A bond ratings intact. In comments released by his office, the Democrat said:
“The State of Washington’s AA+ ratings have been affirmed by Fitch Ratings, Moody’s (Aa1) and Standard & Poor’s. The S&P rating reflects their ‘view of the state’s strong financial policies and practices, including consistently good responsiveness to recurring downward revisions to state revenue forecasts.’ S&P maintained a stable outlook for the state, while Fitch and Moody’s revised the state’s outlook to ‘negative.’ The outlook revisions reflect the challenges faced by the state in addressing a sizable budget gap that developed after the adoption of the current biennial budget coupled with the constrained revenue raising and spending control flexibility.
“As recognized by the rating agencies, the Legislature has historically done an excellent job in making budgetary adjustments to meet revenue shortfalls. We fully expect them to do the same now.”
McIntire’s spokesman Chris McGann said a similar warning or downgraded outlook was given in 2010 before lawmakers agreed to a package of spending cuts and revenue increases to balance the budget.
Brad Shannon bshannon@theolympian.com
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