CHARLESTON, W.Va. — The state’s finances have received a stable outlook from a key bond rating agency.
Fitch Ratings is keeping the state’s bond rating at ‘AA’ with a ‘stable’ outlook.
The rating is part of a recent report posted by the company on its website.
The Justice administration is pleased with the report, according to state Revenue Secretary Dave Hardy.
“It says West Virginia’s stable economy is still stable and (Fitch) is keeping our bond rate stable which is really great news,” Hardy said during an appearance Wednesday on MetroNews “Talkline.”
The report comes at a key time with the state considering a possible $600 million general obligation bond sale on Wall Street before the end of the year to finance the Roads to Prosperity program.
“That ratings on our bonds makes our bonds more appealing and we’re able to get a better price on our bonds and pay less interest,” Hardy said.
In its report, Fitch said the rating is based on the state’s “economic concentration on natural resources development” along with a strong ability to control revenue and spending and a commitment to address the state’s liability profile. The report also cited the state’s Rainy Day fund.
The report did include several notes of concern.
“Fiscal pressures are expected by Fitch to continue over the long-term despite some improvements in recent fiscal years and active management of operations remains vital to maintaining credit quality given volatility in the state’s direct revenue sources,” the report said.
West Virginia remains the nation’s second largest coal producer and has moved up to the seventh largest producer of natural gas, according to the Fitch report.
State revenue collections exceeded estimates by $20 million in September after missing the mark the first two months of the new fiscal year. Hardy said the revenue collection shortfall is now around $30 million.
“If you put it in perspective of the state’s budget that is not a very large number,” Hardy said. “Thirty million is a huge amount of money but it’s a $4.7 billion budget so being $29.8 million down after three months particularly when we had a really bad July is not a bad place to be.”
There’s been talk of a possible mid-year budget cut but apparently a final decision hasn’t been made. Hardy said state agencies are being told to prepare for one in case Gov. Jim Justice decides to do it.
“We are not going to allow this budget to get away from us,” Hardy said. “The governor has told us we need to consider and our agency heads know already that that’s a possibility.”