State credit ratings

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State tax policy
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Sales tax
Corporate income tax
Excise tax

The table below lists state credit ratings from 2004 to July 2017. Credit rating agencies, such as Standard and Poor's, assign grades to states that take into account a state's ability to pay debts and the general health of the state's economy.

Generally speaking, a higher credit rating indicates lower interest costs on the general obligation bonds states sometimes sell to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). This, in turn, results in lower interest costs, thereby lowering the cost to taxpayers. If a state receives a lower ranking, or its credit rating is downgraded, the cost of borrowing money goes up, which can negatively affect a state's budget and economic growth.^[1][2][3]

Credit ratings by state

The table below provides the credit ratings for each of the states from 2004 to July 2017. Standard and Poor's grades range from AAA, the highest available, to BBB-, the lowest.^[4][5]

Noteworthy events

Illinois credit rating

See also: Illinois state budget and finances

On June 1, 2017, Stanford and Poor's Global Inc. and Moody’s Investors Service, credit rating agencies, downgraded Illinois’ credit rating. S&P also said that it might downgrade the state's credit rating further if the state failed to adopt a budget. The downgrade placed the state’s credit rating at one step above a junk rating (a low rating which indicates the state is a high risk investment). At the time of the downgrade, the state had not passed a budget in two years due to disagreements between the Democratic state legislature and Republican Governor Bruce Rauner. According to S&P analyst Gabriel Petek, “the rating actions largely reflect the severe deterioration of Illinois' fiscal condition, a byproduct of its stalemated budget negotiations, now approaching the start of a third fiscal year.” Prior to this downgrade, Illinois' credit rating was the lowest in the country. If downgraded again, Illinois would become the first state to receive a junk rating from a credit agency.^[6]

On July 6, 2017, the Illinois General Assembly passed a $36 spending plan and $5 billion tax increase. The legislature overrode Rauner's veto to pass the budget, which ended the two-year budget impasse. Moody's Investors Service said they may downgrade Illinois' rating despite the budget. On July 5, after the state Senate voted to override the veto, Moody's wrote that, "so far, the plan appears to lack concrete measures that will materially improve Illinois' long-term capacity to address its unfunded pension liabilities." S&P, in response to the budget passing, removed the state from its credit watch for a potential downgrade.^[7][8]

On October 9, 2017, S&P maintained the state's BBB- rating following the state's plan to sell $6 billion in bonds. The agency told the state that it still faces fiscal issues that could push the rating down further.^[9]

See also

• State budget and finance pages
• Glossary of state budget terms
• Pew Charitable Trusts

External links

• Search Google News for this topic
• Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2014," June 9, 2014

Footnotes

v • e Budget policy
Budget background	Government budgets • Cost of state transparency websites • State budget issues • Public employee salaries • Public pensions • States with spending online • Glossary of state budget terms • Total state expenditures • State spending by function as a percent of total expenditures
State budget and finance pages	Alabama • Alaska • Arizona • Arkansas • California • Colorado • Connecticut • Delaware • Florida • Georgia • Hawaii • Idaho • Illinois • Indiana • Iowa • Kansas • Kentucky • Louisiana • Maine • Maryland • Massachusetts • Michigan • Minnesota • Mississippi • Missouri • Montana • Nebraska • Nevada • New Hampshire • New Jersey • New Mexico • New York • North Carolina • North Dakota • Ohio • Oklahoma • Oregon • Pennsylvania • Rhode Island • South Carolina • South Dakota • Tennessee • Texas • Utah • Vermont • Virginia • Washington • West Virginia • Wisconsin • Wyoming
Tax policy background	Personal income tax • Sales tax • Corporate income tax • Property tax • Excise taxes • Estate and inheritance taxes • Capital gains tax
State tax policy pages	Alabama • Alaska • Arizona • Arkansas • California • Colorado • Connecticut • Delaware • Florida • Georgia • Hawaii • Idaho • Illinois • Indiana • Iowa • Kansas • Kentucky • Louisiana • Maine • Maryland • Massachusetts • Michigan • Minnesota • Mississippi • Missouri • Montana • Nebraska • Nevada • New Hampshire • New Jersey • New Mexico • New York • North Carolina • North Dakota • Ohio • Oklahoma • Oregon • Pennsylvania • Rhode Island • South Carolina • South Dakota • Tennessee • Texas • Utah • Vermont • Virginia • Washington • West Virginia • Wisconsin • Wyoming
Comparative analysis of state debt	Federal outlays to state government (2014-2017) • State tax revenue projections and shortfalls (2020-2021) • Proportion of state government general revenues from the federal government (2014-2018) • State debt per capita (2014-2018) • State unfunded public pension liabilities, 2003-2018