Fitch Ratings today announced that it has revised the State of Michigan's Rating Outlook for all bonds to Positive from Stable. Fitch also affirmed Michigan's General Obligation Credit Rating "AA-."
"This is very positive and encouraging news," Gov. Snyder said. "Wall Street is recognizing Michigan's hard work and commitment to returning our state's fiscal integrity and fixing our structural deficit once and for all while starting to pay down our long-term debt and save for the future. Working together with lawmakers, we demonstrated in just over six months that we can avoid gridlock, move Michigan forward and lay a strong foundation for the future. We've got AAA in our sights and will work relentlessly to get there."
In its announcement, Fitch noted, "The Positive Outlook reflects prudent budgeting and efforts to grow reserve levels in the context of an economy beginning to slowly rebound."
"We put together a strong budget that's now balanced for the long term, and the rating agencies have taken note," said budget director Nixon. "We realize getting back to AAA won't happen overnight, but this is a good first step in the right direction."
In June, Governor Rick Snyder, State Budget Director John Nixon, and State Treasurer Andy Dillon traveled to New York to update Wall Street rating agencies on the State's budget and revenue picture in an effort to return the State of Michigan to AAA Credit Rating status.
"Enacting a balanced budget, without the use of one-time measures, was a critical step in this process," said State Treasurer Dillon. "However, we must continue to be vigilant in paying down future obligations while we work to replenish the state's budget stabilization fund."
According to Fitch, continued evidence of a return to structural (budget) balance, continued progress toward re-building reserve funds, and continued employment recovery could trigger a future rating action for Michigan.