Monday, March 8, 2005
Contact: Spence Jackson, (573)751-0290
Missouri Receives Favorable Bond Rating From Moody's
JEFFERSON CITY - Missouri will remain economically stable through 2006 provided that Gov. Matt Blunt’s reductions in state spending are enacted, according to a service that helps determine Missouri’s bond rating. Moody’s Investors Services said this week that Missouri will retain its AAA bond rating, which means bonds issued by Missouri are judged to be of the highest quality by investors. These bonds also carry the smallest degree of investment risk.
"The outlook for Missouri is stable, based on expectations that the state's financial results during the remainder of fiscal 2005 and the early part of 2006 are in line with forecasts, and that proposed reductions in spending such as those proposed by the governor will be enacted, helping remove the state's need for non-recurring budgetary measures," Moody’s said.
As part of its analysis of Missouri, Moody’s reported that Blunt’s effort to reduce state spending on Medicaid by $231 million would be critical to reigning in costs and maintaining Missouri’s bond rating.
"While it is unclear whether the Legislature will agree to these proposals, Moody's expects that the state will, in some way, take action to rein in Medicaid funding requirements as part of a broader effort to return to structurally balanced operations," Moody’s said.
Moody’s report is also good news for local school districts whose bonding capability is tied to the state’s bond rating. Schools could be seriously and negatively impacted if the state lost its AAA rating.
While pleased with the state’s strong bond rating, Blunt said Missouri must heed the warning issued by Moody’s in order to maintain a strong bond rating and attract new family-supporting jobs to the state.
"It is critical that Missouri continue to prosper, and while this rating is encouraging there is more that can be done," Blunt said. "Tough decisions have to be made, but in the long run the people of Missouri will benefit through higher paying, higher quality jobs."