Washington State Maintains High Credit Rating in Latest Report

(The Center Square) - Washington state continues to maintain high credit ratings according to the latest reports issued by three credit rating agencies. According to those reports, Moody’s Investors Service gave the state an “Aaa,” the highest rating possible, while Fitch and S&P gave the state “AA+” ratings.

The ratings are based on numerous criteria, including the state tax structure, the level of funds in the state’s emergency reserves or “rainy day fund,” and economic stability.

In its report, Moody’s Investors Service wrote that the state has “strong underlying fundamentals of its economy and the state’s strong governance practices which will continue to support sound reserves.”

In its report, S&P wrote that “while we anticipate its debt profile will remain relatively high, we believe its collective liabilities will remain manageable and not present meaningful budgetary pressure in the medium term.”

S&P also noted efforts to replenish the emergency reserve fund over the next two years. By 2025, it is expected to have $1.3 billion in reserves, constituting 3.9% of annual spending. Regarding the state tax on the income derived from the sale of capital gains, which was legally challenged and upheld by the State Supreme Court, S&P wrote that “while a positive development on the revenue front, it remains credit neutral, in our view.”

In a statement, State Treasurer Mike Pellicciotti wrote that the high ratings enabled the state to sell $1.1 billion in bonds, which "will save the state millions of dollars over the term of the loans, in the form of low debt costs."

“Washington continues to be an attractive investment option thanks to sound financial management, a healthy state economy, and strong projected revenues," he wrote. "Thanks to leadership from the Legislature this session, Washington can continue to count itself among the top tier of states, meeting the needs of our residents today while maintaining stability in our long-term financial outlook.”

Senate Ways and Means Chair Christine Rolfes, D-Bainbridge Island, wrote in a statement that the legislature “worked hard to craft responsible and ambitious state budgets that will improve lives while making our economy stronger and more resilient. Our commitment to sound fiscal stewardship and responsible budgeting practices is one of the big reasons Washington remains one of the best places in the world to live, work, and raise a family.”