After conducting a thorough review of the state of Michigan’s economy and finances, Standard & Poor’s today announced they have increased the state’s credit rating from AA- to AA with a “stable outlook.”
S&P’s AA credit rating enables the state to borrow money at a lower interest rate—saving taxpayers millions of dollars—and reflects improvements in the state’s economic and financial condition since the recession.
This is also S&P’s first state-level credit rating upgrade since the states of Hawaii and Tennessee in 2016. To date, two states have been downgraded this year.
“This is great news for all Michiganders and further confirms Michigan’s comeback,” Gov. Rick Snyder said. “For the past eight years, our state has undergone a reinvention leading to eight back-to-back balanced budgets and more than $1 billion in our rainy day fund. Today’s announcement allows us to build on Michigan’s momentum and ensure continued success on the path toward our future.”
The S&P credit rating report stated the upgrade reflects Michigan’s demonstrated resilience following the Great Recession and improved credit fundamentals that they believe will persist through economic cycles. Additionally, the report recognized that the state has taken action to manage its economic volatility through increasing its reserves, structurally aligning its budgets and adopting pension reforms.
“I am pleased Wall Street has acknowledged the hard work and effort taken to improve the state’s financial position and economy in recent years,” State Treasurer Nick Khouri said. “In the past decade, Michigan has led economic growth in the Midwest and is among the top 10 states nationwide. This rating reaffirms that we continue to be good stewards of taxpayers’ money as the economy continues to grow and becomes more diversified.”
Prior to offering $141.8 million in General Obligation Environmental Program Bonds, S&P, Moody’s Investor Services and Fitch Ratings reviews the state’s economy, finances and other factors to determine a credit rating. Money from this bond sale pays for environmental, natural resource and water quality programs administered by the Michigan Department of Environmental Quality.
Credit ratings from Moody’s and Fitch are anticipated within the week.