Pennsylvania Gov. josh Shapiro announced Friday that the state’s credit rating outlook was upgraded to “positive” by Moody’s.
The credit rating agency said the state’s economy and budgeting practices are strong and are setting the state up for long-term success, Shapiro’s office said. Previously, the state’s outlook had been rated “strong.” The move to “positive” is an important measure of the state’s financial outlook, Shapiro said.
“Today’s rating reaffirms that our Commonwealth is on sound financial footing – and that with the commonsense investments we are making, Pennsylvania is on a path for continued economic growth,” Shapiro said. “Together with leaders in both parties, we passed a bipartisan, commonsense budget that makes historic investments in Pennsylvania schools and businesses, supports our law enforcement and first responders, and makes our families healthier.”
Moody’s said the upgrade was a result of a significant increase in budget reserves over the past three fiscal years and a rainy day reserve fund that remains near current levels “due to sound budget management and continued steady revenue growth.”
The agency affirmed the state’s A3 issuer rating on approximately $10.7 billion of outstanding general obligation bonds. Additionally, the state was rated A1 and A2 on outstanding appropriation backed debt and A1 on the Pennsylvania School District Intercept Programs and A2 on the Pennsylvania General Municipal Pension System State Aid Program. The Pennsylvania Turnpike Commission received an A1 rating on $992 million of outstanding Motor License Fund-enhanced Turnpike Subordinate Special Revenue Bonds.
Senate Appropriates Committee Chair Sen. Scott Martin (R-Lancaster) said Republican leadership over the past three years had a hand in the upgrade.
“For years, Senate Republicans have resisted calls for billions in new spending and taxes and fought for more responsible and sustainable approaches to budgeting,” Martin said in a statement. “We made it a top priority over the past three years to build up our Rainy Day Fund and avoid recklessly draining fund balances and budgetary reserves. We also avoided dangerous pitfalls like spending one-time emergency funds on recurring expenses. It is encouraging to know that all these responsible decisions are making a real difference.”