Jackson, MS. Standard and Poor’s (S&P Global) has revised Mississippi’s general obligation debt outlook from negative to stable, largely crediting the State’s recent proactive approaches to facing pension debt, infrastructure, and budgeting challenges.
“This is great news for Mississippi taxpayers,” said Treasurer Lynn Fitch. “S&P’s upwards revision is a clear sign to the markets and potential bond buyers that Mississippi is a good place for their investment. And, as we approach two upcoming bond sales this fall, including one focused exclusively on transportation and infrastructure needs, the timing of this upgrade couldn’t be better.”
The S&P report makes clear that the “revision reflects our view of Mississippi’s concerted effort to build reserves; a demonstrated commitment to improve the funding ratio of the state’s pension system; and new revenue streams, along with conservative budgeting practices, that should contribute to greater flexibility in future budget years.”
Two weeks ago, Treasurer Fitch led a team, including PERS Executive Director Ray Higgins and Department of Finance and Administration (DFA) Executive Director Laura Jackson, to New York City to meet with analysts at S&P, Fitch Ratings, and Moody’s. Their presentations highlighted recent positive actions to mitigate some of the concerns the rating agencies have noted in past reports, such as our unfunded pension liability, low educational attainment, and reliance on one-time moneys in budgeting.
“All of the credit rating agencies have demonstrated increasing concern about rising pension liabilities, not just in Mississippi but across the nation,” continued Fitch, who is a member of the PERS Board of Trustees. “But, the action taken by the PERS Board in June to institute a new funding policy and bring additional money into the trust fund clearly made a very positive impact. The rating agencies wanted to see action, and Mississippi showed them just that.”
The full report is attached. But, it also made note of the recent efforts in the Special Session called by Governor Bryant to increase spending for transportation and infrastructure needs as well as renewed commitment to fiscally conservative budgeting practices.
Mississippi’s current ratings for general obligation debt are now:
Standard and Poor’s AA Stable
Moody’s Aa2 Negative
Fitch Ratings AA Stable