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Treasurer Fitch: State Continues to Benefit from Lawmaker’s Fiscal Discipline

Mississippi State Treasurer Lynn Fitch spoke today at the Legislative Economic Briefing, updating legislators on the state’s current bond indebtedness, the Treasury’s debt service request for fiscal year 2016, the most recent rating agency discussions, and the debt affordability plan.
Treasurer Fitch told lawmakers that currently the state has 100% general obligation bonds outstanding of $3.9 Billion as of December 31, 2014. Factoring in the current bond sale that is set to close by mid-February 2015, the estimated fiscal year-end balance is projected to be $4.17 Billion, less than a 1% increase over June 30 of last year.
“Conservative legislative authority and disciplined spending on the part of the Legislature, along with conservative issuance on the part of the State Bond Commission over the past several years has created a positive trend, improving our overall position,” noted Treasurer Fitch.
Treasurer Fitch explained that if the state can continue to use fiscal restraint when authorizing new bonds, the state can see a continued decline over time in existing debt service payments. Fitch also stressed the importance of using recurring revenues to pay for recurring expenses like debt service, which is currently 7.01% of budget outlays.

This morning, Treasurer Fitch noted within the past year, the Treasury has continued to communicate with all three rating agencies. While the state has a good rating, there is room for improvement.

“Thanks to the Legislature’s actions in the 2014 session, we have reduced our dependence on the use of one-time funds,” stated Treasurer Fitch. “Our ultimate goal is to move from an AA-rated state to an AAA state.”
Treasurer Fitch reported other steps in the right direction. She reaffirmed her commitment to changing Mississippi’s financial culture through the Treasurer’s Education About Money (TEAM) initiative, one of her highest priorities since taking office.  In 2014, the Treasury released the state’s first Debt Affordability Study, which received praise from rating agencies and the chairman of the Municipal Securities Rulemaking board. “I believe in being transparent with Mississippi taxpayers,” stated Treasurer Fitch. “This study provides the public with a resource to truly understand the state’s debt. Not only are we able to give decision makers and our citizens a clearer picture of the state’s debt, the study is also viewed favorably by rating agencies.”
Treasurer Fitch closed her briefing with the hope that policymakers use the Debt Affordability Plan to inform their decisions regarding the authorization of the new debt. The updated plan is expected to be released in March 2015.

Click here to see Treasurer Fitch's Briefing