Oklahoma Credit Outlook Improves
Mike Seals - April 14, 2021 9:47 am
OKLAHOMA CITY – Saying Oklahoma state government has done well managing its finances during the pandemic, Standard & Poor’s Global Ratings has revised the state’s outlook from negative to stable, State Treasurer Randy McDaniel announced today.
S&P had placed the state on negative outlook at the start of the COVID-19 pandemic last year. With the revision announcement, the state’s current credit rating of AA was affirmed.
Treasurer McDaniel said the outlook change is encouraging and should help the state reduce interest costs on future bond issues.
“State leaders have exercised fiscal discipline during the pandemic,” McDaniel said. “This announcement from a widely respected independent source is welcome news.”
The S&P outlook change also anticipates responsible decision-making will continue.
The report states the revision is based, in part, on “the expectation that Oklahoma’s legislative and executive branches will reach consensus on actions to restore and maintain structural balance in future budgets and sustain a commitment to rebuilding reserves.”
The state’s primary reserve funds are the Constitutional Reserve Fund and the Revenue Stabilization Fund. They currently contain approximately $230 million, which is about 3 percent of general revenue appropriations. The combined balance topped $1 billion prior to the pandemic.
Other factors cited by S&P for its more favorable outlook include the state’s relatively low debt burden and its decade-long history of sufficient pension funding.