Well, this should help blunt the claim that Governor Patrick hasn’t managed the state’s finances well. Turns out, the people who actually pay attention — and aren’t running against him — think he’s done a good job. Email (no link):
Fitch Ratings, Moody’s Investor Services and Standard & Poor’s all affirmed the Commonwealth’s ‘AA’ ratings with a stable outlook.
Moody’s cites as the first credit strength of the Commonwealth, “effective management during strained economic times, with a willingness and ability to promptly identify and close gaps through use of both new revenues and spending reductions.”
Fitch’s report says, “Massachusetts’ ‘AA’ rating reflects considerable economic resources and a record of prudent financial management…the rating outlook is stable based on the expectation that the Commonwealth will continue to address economic and revenue weakening in a manner consistent with its demonstrated sound financial practices.”
Standard & Poors notes the Governor’s “strong and conservative budget management practices, with swift action to restore balance after identifying revenue shortfalls in the past year.” The Commonwealth’s stable outlook reflects Standard & Poor’s view of the “Commonwealth’s proactive approach to managing budget volatility in the past year. Revenue adjustments have been frequent and gap-closing actions have been swift to restore balance.”
Think they’re being that nice to all the states? Think again.
Many states have seen their credit rating downgraded over the last 18 months, as the national downturn affects state revenue collections and leaders are forced to respond. Moody’s has downgraded states like Ohio, Nevada and Michigan, while states like Connecticut, Pennsylvania, Florida, Michigan and Kentucky have received negative outlooks.
This is very good news for all of us, as a high bond rating saves lots of taxpayer money. It also happens to be good news for Governor Patrick. Well done.
but why anyone pays any attention to the ratings agencies, which were a major cause of the economic collapse, is completely beyond me.
the fact is that creditors do pay attention, and adjust their effective interest rates accordingly. Therefore, keeping a strong bond rating means that we pay lower interest rates — which means that we get more infrastructure per tax dollar.
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p>That’s a good thing no matter how you slice it.
I know this is not a sexy subject, but it is critical for the Commonwealth. These independent evaluations show that the Governor has provided a steady, calming hand during a very difficult national economic crisis, and has guided the state in a way that has positioned us well for the future.
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p>This stuff doesn’t get a lot of attention, but Governor Patrick has taken many steps to move away from the reckless financing schemes of past administrations, and put in place a more transparent and accountable finance structure for the Commonwealth that is focused on long-term investments that will help our economy grow.