Fitch Ratings Affirms Maine’s Credit Rating, Upgrades Outlook from “Stable” to “Positive”

Governor Janet Mills and State Treasurer Henry Beck announced today that Fitch Ratings, one of the top three credit rating agencies internationally, along with Moody's and Standard & Poor's, has revised their Rating Outlook for Maine from Stable to Positive and affirmed its AA rating on long-term IDR (Issuer Default Rating) for the bonds of the State of Maine.

In addition, Fitch assigned an 'A+' rating to the $137.8 million in bonds to be issued by the Maine Health and Higher Educational Facilities Authority (MHHEFA).

In its justification, Fitch attributed the revision of their Rating Outlook from Stable to Positive due to “Maine's improved budgetary management over the past several biennia, with the state able to achieve structurally balanced budgets for several consecutive fiscal years while, at the same time, substantially increasing its reserve cushion, particularly within the rainy-day fund. Maine's ability to manage higher spending in the current fiscal 2024-2025 biennium while maintaining fiscal balance and preserving recent gains in reserves at or near present levels could result in a rating upgrade.”

Fitch credited their affirmed Maine's 'AA' IDR rating citing “the state's solid budgetary controls that have allowed it to maintain fiscal and operating balance for several years, along with a low long-term liability burden that has shrunk over time compared to the economic resource base. Maine has made progress in restoring fiscal flexibility by rebuilding its reserves to historically high levels.” 

Under Governor Mills’ leadership, Maine’s Budget Stabilization, or Rainy Day Fund, has reached its record high, statutory maximum of $968.3 million.

“Once again, a respected international credit rating agency has affirmed that our deliberate policy choices and responsible fiscal management have put Maine on solid financial footing,” said Governor Janet Mills. “We welcome this rating and will continue to work with the Legislature to keep Maine in a strong fiscal position.”

“Fitch’s outlook upgrade of Maine’s credit outlook did not happen by accident. I always tell investors and the rating agencies that Governor Mills and this Legislature have made specific and intentional decisions to improve our reserves, boost growth, and invest in Maine people and businesses in a fiscally responsible way,” said Henry Beck, Maine State Treasurer.

Additionally, under Governor Mills’ leadership, Maine’s real GDP has grown by 9.1 percent – the 6th best rate of growth in the nation and the best rate of growth in New England. Personal income has also grown by 12.7 percent in Maine from 2019 to 2022, ranking 11th best in the country and best in New England. The unemployment rate stands at a near record low of 2.8 percent and has remained below four percent for 23 consecutive months – the second longest period, below both the New England and U.S. averages, with Maine’s total private employment reaching a new record high of 549,000 filled jobs in October 2023.

In 2022, Maine had the 11th highest net migration rate in the United States and the highest rate in New England. Maine was also one of only two states to see a decrease in median age from 2020-21, led by increased migration of younger populations into the state.

“These positive ratings by another top credit agency affirms the Governor’s prudent fiscal policies and her work to strengthen Maine’s economy,” said Kirsten Figueroa, Commissioner for the Department of Administrative and Financial Services.“Maine’s record high savings, and the Administration’s commitment to live within our means continues to have a positive impact on our overall financial position.”

Governor Mills’ fiscal prudence has maintained a solid cash position with an average daily balance of more than $4 billion, allowing for internal borrowing for capital projects to avoid unnecessary finance fees and expenses.

Moody’s and Standard & Poor’s credit rating agencies have affirmed Maine’s Aa2 bond rating and in May of 2023, Moody’s increased Maine’s outlook from stable to positive, citing Maine’s continued GDP growth at or above the national rate, and Maine’s growing population and employment rates.