Follow us:

The Today File

Your guide to the latest news from around the Northwest

January 30, 2012 at 5:23 PM

1st Fitch, now Moody's downgrades Washington's debt ratings

Associated Press

Another agency has changed the outlook for Washington’s debt ratings from stable to negative, citing the state’s ongoing budget troubles.

Moody’s Investors Service said in its rationale released Monday that the state faces challenges in fixing structural budget problems, noting that Washington faces a revenue shortfall at a time when other states are reporting no budget problems or only minor gaps.

“The outlook revision to negative from stable reflects the magnitude of the revenue falloff that continues to challenge the state as it struggles to recover from the recession,” Moody’s statement said.

On Friday, Fitch Ratings changed its outlook from stable to negative.

Moody’s has an Aa1 rating on Washington’s general obligation bonds, and Fitch’s rating is AA+. Each is one notch below the best possible rating.

Moody’s noted that the state’s reliance on a sales tax has made it challenging during a recession that has impacted consumer confidence. The agency cited other challenges, including reliance on the cyclical aerospace industry, above-average debt ratios and frequent voter initiatives that add to budget challenges.

Washington lawmakers are working to close a roughly $1 billion budget deficit and want to leave several hundred million dollars as a buffer.

“As recognized by the rating agencies, the Legislature has historically done an excellent job in making budgetary adjustments to meet revenue shortfalls,” said Washington State Treasurer James McIntire. “We fully expect them to do the same now.”

Standard & Poors has a stable outlook on Washington’s debt.

Comments | More in Business/Technology, Government | Topics: recession; olympia; state government; state deficit

COMMENTS

No personal attacks or insults, no hate speech, no profanity. Please keep the conversation civil and help us moderate this thread by reporting any abuse. See our Commenting FAQ.



The opinions expressed in reader comments are those of the author only, and do not reflect the opinions of The Seattle Times.


The Seattle Times

The door is closed, but it's not locked.

Take a minute to subscribe and continue to enjoy The Seattle Times for as little as 99 cents a week.

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Subscriber login ►
The Seattle Times

To keep reading, you need a subscription upgrade.

We hope you have enjoyed your complimentary access. For unlimited seattletimes.com access, please upgrade your digital subscription.

Call customer service at 1.800.542.0820 for assistance with your upgrade or questions about your subscriber status.

The Seattle Times

To keep reading, you need a subscription.

We hope you have enjoyed your complimentary access. Subscribe now for unlimited access!

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Activate Subscriber Account ►