Affirmation of Maine’s credit ratings come as other states struggle to mitigate the economic impacts of COVID-19
Governor Janet Mills and State Treasurer Henry Beck announced today that Moody’s Investors Service and S&P Global Ratings, global companies that analyze and issue reports of credit worthiness, have affirmed their strong credit ratings and stable outlooks on the State of Maine’s general obligation debt. Moody’s affirmed both their Aa2 rating and stable outlook while S&P affirmed their AA rating and stable outlook.
In its affirmation, S&P praised Maine’s “active budget management” and the State’s “steady progress in strengthening its reserve profile” while noting that the State’s cash pool is “very good.” Moody’s stated that Maine has a “strong financial position with adherence to governance best practices.” The affirmation of Maine’s ratings comes as at least 22 states’ ratings and outlooks have been downgraded (PDF) amid the economic impacts of the COVID-19 pandemic.
“Our Administration’s prudent fiscal management during the pandemic, coupled with Federal support and the efforts of Maine people, has sustained revenues, ensured the continuation of programs and services so important to Maine people, and allowed us to keep pace with our obligations, all while giving money back to the taxpayers through revenue sharing, tax fairness credits for property taxpayers, and relief for those hardest hit by the pandemic,” said Governor Janet Mills. “These stable ratings demonstrate that Maine is in a solid financial position, our economy is recovering, and our state is a worthy investment.”
“I am pleased to report these stable ratings and that S&P recognized the strength of the Treasurer’s Cash Pool, which we have carefully managed during this turbulent time,” said Henry Beck, Maine State Treasurer. “Our finances are healthy because of decisions by Governor Mills and the Legislature, bold federal investment, and the hard work and innovation by Maine people and businesses that makes Maine’s economy run.”
In May 2020, amid the pandemic, Moody’s and S&P both reaffirmed Maine’s stable bond ratings, praising at the time Maine's adherence to governance best practices and writing that “Maine’s active budget management and good reserve profile will help the state to navigate through the economic uncertainty and stresses brought on by the COVID-19 pandemic.”
Last month, Maine’s nonpartisan Revenue Forecasting Committee upgraded the State’s General Fund revenue forecast (PDF) to a level surpassing the amount of revenue that had been forecasted prior to the onset of the pandemic.
Additionally, despite the impacts of COVID-19, the Budget Stabilization or “Rainy Day” Fund has grown under Governor Mills’ tenure by more than $50 million, to a record high of $267.9 million. Governor Mills has proposed depositing another $52 million into the Fund, which, if approved, would grow the Fund to $319.9 million, an increase of more than $111 million during her tenure.
“Today’s positive ratings are a testament to this Administration’s disciplined budgeting approach and the impact of Federal relief,” said Kirsten Figueroa, Commissioner for the Department of Administrative & Financial Services. “Coupled with low interest rates, Maine is financially well positioned to undertake a bond offering.”
Treasurer Beck, Commissioner Figueroa, the State Economist, and other members of the Executive Branch presented to Moody's and S&P via telephone on May 18, 2021. State Treasurer Henry Beck intends to conduct a bond sale in June of 2021 that will fund approximately $117 million in voter-approved projects.
Initiatives benefiting from the bond sale include ports, harbors, marine transport, aviation, freight, rail, transit and pedestrian/bicycle trails; high speed internet infrastructure for unserved and underserved areas; the University of Maine System, DEP competitive grant program to upgrade municipal culverts at stream crossings; highway and bridge projects; and the University of Maine System and Maine Community College System.