Haslam: State keeps high credit rating but is on Moody's watchlist

Tuesday, October 4, 2011 at 3:16pm
Staff reports

Tennessee Gov. Bill Haslam Tuesday said Tennessee will maintain a high rating from the nation's three bond-rating agencies, something he attributed to "Tennessee’s leadership and conservative fiscal management.”

The state will keep its Aaa rating from Moody’s Investor Service, its AAA rating from Fitch Inc. and its AA+ rating with a positive outlook from Standard & Poor’s. Moody’s, however, did place the state’s rating on “negative outlook,” following the agency’s decision in August to confirm the Aaa bond rating of the United States while assigning a negative outlook.

The ratings allow the state to pay lower interest rates when it borrows money. Tennessee has one of the lowest debt burdens of any state in the country, a fact that is a strong positive in the evaluation process.

“We have a proven history of fiscal responsibility in Tennessee, and I appreciate the confidence the agencies are showing in our current leadership team by maintaining the state’s strong ratings during these turbulent economic times nationally,” Haslam said in the release. “We are committed to fiscal restraint in managing our budget and will continue to prepare for the likelihood of less federal funding out of Washington.”

Finance and Administration Commissioner Mark Emkes, along with state constitutional officers including Comptroller Justin Wilson, Treasurer David Lillard and Secretary of State Tre Hargett, traveled to New York in August for preliminary presentations to two of the ratings agencies. Following the meetings, Emkes asked state agencies to draft contingency plans to prepare for reductions in federal funding.

Recently, Haslam and Emkes joined Lt. Gov. Ron Ramsey, R-Blountville, and the constitutional officers in New York for the state’s annual meetings with the three agencies. There they made the case that Tennessee is a well-managed state with low debt and is well positioned to weather the current financial climate, the release noted.

The Tennessee Constitution requires the state to balance its budget every year, and any capital project must be funded at 11 percent of its cost in the first year. Haslam emphasized such structural decisions in state government are important indicators of stability and prudent management. 

4 Comments on this post:

By: pswindle on 10/4/11 at 2:25

We can thank Gov. Bredesen for the rating. Gov. Haslam it is up to you to not lose the AAA rating. The bills that you have signed this year makes me wonder where TN will end up. You have to think of al of the people of TN and not the wealthy and corporations. Teachers need their collective bargaining back and the voter ID law should have never happened.

By: govskeptic on 10/5/11 at 7:59

pswindle you worry too much. Teachers will be just fine as will the
voters (even those in Memphis) with their shiny new Photo ID's!

By: jonw on 10/5/11 at 12:28

JON

govskeptic, you know that pswindle had to throw his negative “union made” comment into a positive news story.

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