Fitch Ratings affirms Florida’s AAA credit rating just after
the nation’s fell to AA+ for only the second time in U.S. history
Fitch Ratings today released a report affirming Florida’s AAA rating due to the state’s “sound financial management practices” and “broad expenditure and revenue controls buttressed by robust reserves.”
The state’s demonstrated fiscal responsibility has helped maintain Florida’s standing as number one in the nation for small business formations. By keeping corporate taxes low and providing small businesses easy access to capital, the state is making it easier for small businesses to thrive and employ more Floridians further strengthening the state’s flourishing economy.
Compared to other large U.S. states, Florida continues to top the ratings given for California (AA+) and New York (AA+). Additionally, the United States economy was recently downgraded to a AA+ rating for only the second time in the country’s history. In its rating, Fitch cited “fiscal deterioration over the next three years and repeated down-the-wire debt ceiling negotiations that threaten the government’s ability to pay its bills.”
“11 other countries now boast a higher Fitch rating than the United States,” said Florida Department of Commerce J. Alex Kelly. “It is past time for the mismanaged federal government to look to Florida’s economic prudence and smart fiscal policies as a guide for how to get our nation back on track.”
Florida used its surge in revenue to “bolster reserves, cash-fund capital investments, boost K-12 spending, and deliver tax cuts for Floridians.”
More highlights from the newly released Fitch Ratings report include:
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- Florida exhibits a “very broad revenue-raising authority despite a constitutional restriction on the levy of a personal income tax.”
- The state “maintains ample expenditure flexibility with low carrying costs related to debt and retiree benefits.”
- Florida’s low long-term liability is well below the median for U.S. states.
- Outstanding debt has declined steadily.
- Actual state revenue collections exceeded initial forecasts for the third consecutive year.
- Florida’s reserves will provide the state “considerable financial flexibility to address future downturns in the economy.”
- Florida has “demonstrated a bias to expenditure reduction measures, in conjunction with reserve usage, rather than relying on revenue increases when necessary to maintain budgetary balance, even in core spending areas.”
