Fitch Ratings assigns an 'AA' rating to --
In a release on
In addition, Fitch affirms the following ratings:
The Rating Outlook is Stable.
The bonds are general obligations of the state of
Key Rating Drivers
Commodity-Based Economy: The state's commodity-based, cyclical economy, heavily linked to oil and gas production, has modestly diversified, although one-third of the state's gross state product continues to derive from the production and delivery of raw and intermediate goods.
Financial Operations Have Been Challenged: Financial operations in recent years have been challenging given revenue under- performance, reliance on one-time actions, and spending pressure from education and
Moderate Debt Supported by Strong GO Legal Provisions: Debt levels are moderate and debt issuance is well controlled by policy. There are strong legal provisions for GO debt, with all non- dedicated revenues flowing into the bond security and redemption fund to provide for debt service prior to operations.
Weak Pension Funding Levels: Funding of the state's two largest pension systems is below average and has been declining. The state has implemented modest reforms to reduce its unfunded liability.
The rating is sensitive to shifts in the state's fundamental credit characteristics including management of its financial operations, an above-average liability position, and a commodity- based economy.
Challenged Financial Operations
Despite the state's economic recovery, financial operations in recent years have been challenged by repeated revenue underperformance and forecast budget gaps, which the state has closed through both structural and non-recurring actions. The enacted fiscal 2013
The governor's proposed
Steady Economic Growth in Resource-Based Economy
Moderate Debt Levels with Weak Pension Funding
State debt levels remain moderate, equaling about 3.8 percent of 2012 personal income when including the current issue. By policy, debt issuance is well controlled. However, funding of the state's two largest pension systems is below average and has declined. On a reported basis, the state employees' pension system had a funded ratio of 60.2 percent and the teachers' system was at 56.4 percent as of
On a combined basis, the burden of the state's net tax-supported debt and adjusted unfunded pension (UAAL) obligations approximated 16 percent of 2012 personal income, well above the median for U.S. states rated by Fitch. The calculations include 100 percent of the liability for both state employees (LASERS) and the teachers' retirement system (TRS), which are both the responsibility of the state. In 2012 the legislature approved the governor's proposal to move new employees hired after
Additional information is available at fitchratings.com.
In addition to the sources of information identified in the Tax- Supported Rating Criteria, this action was additionally informed by information from
--'Tax-Supported Rating Criteria' (
--'U.S. State Government Tax-Supported Rating Criteria' (
Tax-Supported Rating Criteria
U.S. State Government Tax-Supported Rating Criteria
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Fitch Ratings assigns an 'AA' rating to