Fitch Ratings announced today it upgraded Idaho to the best credit rating a state can achieve – the AAA credit rating – a step that saves taxpayer dollars on financing of road construction and other public works projects and signals the structural strength of Idaho state government and our economy.
At any one time, only about 10 states have carried the AAA credit rating, indicative of a high level of confidence in how a state’s budget is managed and the strength of the state’s economy. The higher a state’s credit rating, the lower the cost to repay its bonds, saving taxpayer dollars on interest costs.
Governor Little’s comment on the historic credit rating follows:
“We all know the value of an excellent credit score in our personal finances – it enables us to acquire loans at a lower interest rate, saving money in our household budgets. It also indicates discipline and responsibility in how we spend our money. The same is true for states when they achieve the best credit rating out there.
“Thanks to our diligent and unrelenting focus on reining in state spending and saving healthy amounts for rainy days, Idaho has received the AAA credit rating for the first time, and I am very proud. When I took office as Idaho’s 33rd Governor close to three years ago, one of my biggest priorities and one of our most important fiscal accomplishments would be to achieve the AAA credit rating.
“This achievement may not grab headlines the way politically charged issues can, but let me tell you – this will have an impact on your wallets. This is what good government is all about. I appreciate my partners in the Legislature for sharing my passion for maintaining a lean state budget and stable rainy-day funds. Our partners in the private sector, too, have done a tremendous job propelling Idaho’s economy forward.”
Highlights from the Fitch Report on Idaho’s upgraded credit rating include:
- "Idaho has superior financial resilience... Financial resilience is bolstered by the state's practice of maintaining healthy reserve balances and its very strong budget control. The state has shown a willingness to sharply cut spending when needed..."
- "In addition to tax relief, the governor's... plan directed state surplus moneys to fund one-time investments in education and transportation, water, broadband and other infrastructure needs... Idaho's long-term liability burden is low, and is expected to remain low even with expected additional debt issuance under a new transportation bond program."
- "The AAA IDR reflects Idaho’s credit strengths, including… willingness to take action to maintain budget balance and rebuild reserves to strong levels, a low long-term liability burden and expected solid long-term economic growth."
- "The upgrade of Idaho's IDR reflects a sustained trend of balanced finances and rebuilding and maintenance of strong reserves that strengthen the state's financial resilience, and strong revenue trends benefitting from population growth and economic expansion and diversification.”
- "The state's superior gap-closing capacity stems from its practice of building up reserves during periods of economic expansion and a willingness to make spending cuts if necessary, including mid-year, to address economic and revenue weakness."
- "Idaho's economy has seen very strong growth in recent years… The state's economy has been diversifying beyond traditional strengths in agriculture and mining, with growth in the health care, construction, technology, tourism and service sectors."
"(Idaho's pandemic) recovery has out-paced the national level as have the state's labor market trends generally."