CHARLESTON, W.Va. – Gov. Joe Manchin is pleased that for the second consecutive year, a national rating agency has upgraded West Virginia’s credit rating on its general obligation (GO) debt. Moody’s Investors Service upgraded the state of West Virginia’s general obligation credit rating to “Aa1” up from “Aa2.” Moody’s upgraded the state due to its continued fiscal conservatism, strong financial performance, commitment to address its long-term liabilities (pensions and OPEBs) and tight expenditure controls through this recent period of national economic weakness.
“Legislative leaders and members of my administration are receiving the national recognition they deserve for their hard work and the difficult but prudent financial choices they have made. These accomplishments serve as the foundation for a financial house that is not only in order, but is now acknowledged to be among the top-rated states in the country,” Manchin said. “West Virginia has been triumphant during this most challenging financial time in our country’s history and Moody’s recognizes that our efforts have not occurred by accident. More than five years ago, we committed to running a responsible government and that pledge continues to pay off for our state.”
The higher bond rating means that West Virginia, including local school boards, can obtain money to finance major projects, such as infrastructure, at a lower interest rate. This will enable the state to do more at a lower cost and thus will have a positive impact on water and waste water projects as well as certain types of economic development ventures. The ratings suggest that the state’s bonds are more attractive and stable for investors, which means that West Virginia taxpayers get a better deal on the money the state borrows.
“Improving West Virginia’s bond ratings is a goal of Governor Manchin’s Vision 2012,” Virgil T. Helton, Revenue secretary said. “The financial prudence exercised by state government has allowed the state to accomplish this goal two years earlier than expected, even during these challenging financial times.”
Last year, Standard and Poor’s raised the state’s GO debt rating. The Moody’s upgrade, coupled with the previous change from S&P, allows West Virginia to use taxpayer money more efficiently and save money on financial transactions and instead put that savings toward improved taxpayer benefits. Shortly after the upgrade was announced, the state refinanced $37.7 million of State Road Fund Bonds at lower interest rates saving approximately $4,000,000.
In today’s release, Moody’s said, “The state’s ability to keep recurring revenues aligned with recurring expenditures, especially in the current economic cycle where revenues have declined substantially creating large budget gaps in most states, speaks to the governance of the state. West Virginia is one of only a few states that did not experience a budget shortfall during fiscal 2009 primarily because of the state’s conservative budgeting practices.”
Since 2008, West Virginia has been one of only two states to receive an upgrade in ratings from Moody’s.
Please click on the link below to view the full report.
/uploads/WV GOUpgrade Report.pdf
Sara Payne Scarbro