In a report released today, S&P Global Ratings revised the State of Mississippi’s outlook from negative to stable. The rating applies primarily to the State’s general obligation debt outstanding and affirms the positive steps taken by the state’s leadership during the recent special session.
“This is great news for our state,” Gov. Phil Bryant said. “Better educational outcomes, more revenue, low unemployment and an innovative infrastructure funding mechanism will all continue to improve our rating.”
The report cites Mississippi’s concerted effort to build the balance in our reserve funds and our strong budgetary and governmental framework as one of the primary reasons for the outlook revision.
“Mississippi’s ability to self-correct by introducing new policies and by restraining spending contributes to what we view as a healthy financial profile,” the report states. The report also cites budgeting 98 percent of estimated revenue in Fiscal Year 2019 as a positive step.
The recent special session in August to address the state’s infrastructure needs received high praise, as well. The various measures taken by the Legislature to provide much-needed funding for roads and bridges “demonstrates an ability to adjust revenue streams to meet rising costs,” according to the report.
The declining pension-funded ratio has been a concern of credit rating agencies for several years. The recent steps taken by the Public Employees Retirement System Board to increase the employer contribution rate and the development of a new funding policy that will alert the board if certain parameters are breached, have mitigated some concerns. The report acknowledges that the pension system is still a credit pressure, but today’s report says “recent pension reforms position the state to be able to afford the $3.1 billion liability and thus contribute to rating stability.”
S&P Global Ratings Press Release