Florida triple-A credit rating good, credit outlook bad

Apr 12, 2012

The credit rating agency Fitch has reaffirmed the Florida’s triple-A credit rating, but Regan McCarthy reports, the agency also kept the state’s credit outlook as negative.

Karen Krop, a Primary Analyst with Fitch, says the state’s positive rating is thanks to what it calls “strong financial management practices, moderate debt burden and a well-funded pension system.” But Krop says there are some factors that could potentially lead to a change in the state’s rating—like a significantly lowered revenue outlook, leaving the state to depend on reserves. There could also be a ruling in the state’s pension lawsuit that would require Florida to pay its employees back the 3-percent retirement contribution it’s been collecting. But she says it would take a certain mix of things to change the state’s rating.  

“If there were to be a big hit on the budget or a big hit on reserves. It’s really how does the state respond to a negative outcome.”

Two other rating agencies also affirmed the Triple-A rating.