On Wednesday, Republican Georgia Governor Brian Kemp announced that his state had been awarded the highest ratings of AAA with a stable outlook from each of the three main credit rating agencies: FitchRatings, Moody’s Investors Service, and S&P Global Ratings. The news makes Georgia one of only ten states to currently meet this standard.
“I am proud Georgia’s responsible, conservative approach to budgeting has again allowed our state to secure the highest possible bond rating,” said Kemp. “In the face of economic uncertainty on the national level due to bad policies coming out of Washington, D.C., our shared focus with the legislature on careful budgeting and strong economic development pipeline means Georgia will be a safe bet for job creators for years to come. These ratings enable us to save taxpayers millions of dollars each year with low interest rates for borrowing and they highlight the strength of our workforce and stability of our state economy. They also serve as the latest reminder of the results we are delivering every day to hardworking Georgians.”
Fitch explained that “Georgia’s AAA Issuer Default Rating reflects the state’s proven willingness and ability to maintain fiscal balance and a broad-based, growth-oriented economy that supports solid revenue gains over time. Growth in population and jobs has outpaced the nation over several decades, driving steady economic gains, and providing a solid foundation for future growth.”
“Georgia’s long-term liability burden is low, and overall debt management is conservative,” Fitch added. “The state is well positioned to deal with economic downturns with exceptionally strong gap-closing capacity due to its broad control over revenues and spending, coupled with prudent reserve-building practices.”
Moody’s also explained the rating in a statement, saying, “Credit strengths supporting the State of Georgia Aaa stable issuer rating include: (1) Economic and population growth that outperforms the nation; (2) Strong fiscal management including structurally sound budgets and wide financial flexibility; (3) Robust reserves and liquidity that will likely remain high; and (4) Low overall leverage and fixed costs from debt, pension and OPEB liabilities.”
According to a press release from Kemp’s office, “Georgia’s upcoming sale of general obligation bonds will fund $671 million in capital projects and, if interest rates permit, also refund outstanding bonds to achieve debt service savings on a portion of the state’s outstanding debt. The majority of the bond proceeds will fund K-12 education, higher education, public safety, and economic development projects. The Peach State’s AAA ratings will enable the state to sell its bonds at the lowest possible interest costs when it takes bids for those bonds on June 27. The credit rating agencies’ individual ratings, which are AAA, Aaa, and AAA, respectively, are the highest ratings possible, and indicative of sound fiscal management.”
