West Virginia's Bond Rating Improves

A press release from the Governor's Office below details the matter.

Wall Street notices West Virginia’s financial improvement
From The Governor’s Desk: A weekly column by Gov. Joe Manchin
Feb. 23,
: Lara Ramsburg, 304-558-2000

When I took office in 2005, I said we’d have to make tough decisions if we wanted to get this state out of the financial rut it had been in for so many years. That meant fixing the workers’ compensation system, paying down retirement system debt, cutting spending and looking for ways to better manage our debt.

Together with the Legislature and citizens across the state, we’ve been able to accomplish those goals in a timeframe many thought would be impossible. I’m proud to report that financial experts on Wall Street are taking notice of our efforts and they, too, are pleased with what they’re seeing out of West Virginia. The positive changes we are making are producing positive results.

On Friday, I joined members of the Legislature to announce that Fitch Ratings, one of three agencies that assign credit ratings to bonds issued by the State of West Virginia, has upgraded its credit rating of the West Virginia Economic Development Authority lease revenue bonds from A to A+. Earlier in February, Fitch also assigned an A+ rating to the West Virginia School Building Authority capital improvement bonds.

With this upgrade in our rating, Wall Street is sending a signal to the nation and the world that West Virginia’s business climate is improving. In the last two years, together we have cut spending, consolidated control of our debt and made responsible decisions that, combined with a generally growing economy, have helped us better manage the state and its finances.

Fitch noted that the last two years were among the most successful in recent state history. Our economic growth closely followed the nation’s trends with job gains of 1.3 percent in 2004 and 2005. December’s overall employment was up 1 percent from a year ago, while natural resources and mining jobs increased about 6 percent and construction employment rose 3.2 percent.

In deciding to upgrade our credit rating, Fitch recognized that we dedicated more than half of our budget surpluses to reducing pension system deficits, and that we created a second “rainy day” fund in case the main rainy day fund is depleted. The $900 million we put toward excess retirement system contributions since 2005 also contributed to their decision.

The improved rating is more than a gold star on our financial report card. It means West Virginia is more likely to be able to take advantage of lower interest rates and it won’t cost us as much when we borrow money. The tough decisions we make now are saving the state millions of dollars in the future.

We truly are getting our financial house in order and making good on our “Open for Business” promise. The latest financial news is proof that important eyes outside the state are watching and taking notice.
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