Standard & Poor’s Ratings Services has upgraded Florida’s general obligation debt rating from “AA+” to “AAA.”
The state says the financial ratings service based its decision on Florida’s conservative financial and budget management practices, coupled with substantial budget reserves and economic trends that are among the strongest nationally.
Additional factors in the decision, the state says, were Florida’s stable revenue performance during the last several years, its effective management of budget pressures and its growing service-based economy.
The rating also reflects the state’s long-term economic growth prospects, average income levels and moderate debt burden.
“Although Florida will face continued budgetary challenges as it funds approved constitutional amendments relating to education spending and growth-related service demands, the state is well-positioned to manage these challenges,” Standard & Poor’s credit analyst Robin Prunty said.
Florida’s economy had above-average growth in recent years. The state added about 172, 300 jobs from December 2003 to December 2004, with unemployment at 4.5 percent, nearly a full percentage point below the national average.
In January, Moody’s Investors Services upgraded Florida’s general obligation bond rating from “Aa2” to “Aa1.” Only 11 states hold an “Aa1” rating, the second highest given by the international investor service group.
State Chief Financial Officer Tom Gallagher says the S&P upgrade will save the state millions of dollars.
“This is great news that reflects well on the hard work of Gov. Bush and the Legislature to create an economy in Florida that is among the best in the nation. But more importantly, it’s great news for Floridians who work so hard to make this state strong and vibrant.
“This higher rating will save us millions and allow us to continue efforts to reduce the tax burden on our citizens, while still providing necessary services and improving our infrastructure.
“This bond rating shows that our state leaders are conservative in their financial and budget management practices and strong stewards of public dollars. We should be very proud of this accomplishment.”
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