Fitch Ratings on Tuesday downgraded Mississippi’s bond rating outlook from “stable” to “negative,” saying lawmakers have relied too much on “one-time” money for recurring expenses and continue to raid the state’s rainy day fund to balance the budget.
While the agency did not drop the state’s credit rating from AA+, it warned, “The rating may be lowered if the state is unable to consistently fund ongoing operations without relying on one-time revenue sources, if there is weakness in the economy that diverges from the national trend, or if funding for pension liabilities weakens.” A drop in credit rating would cost the state millions in interest rates for general obligation bonds, and can be a turnoff for major economic development projects.
Gov. Phil Bryant said he has warned in his last two proposed budgets that “We must end the practice of using one-time money to pay for recurring expenses.”
“I look forward to working together with the Legislature to end this practice and continue to fill the rainy day fund for future financial challenges in this unsteady national economy.”