Whitmer says Michigan credit rating boost shows economy back on track
S&P Global Ratings moved the state’s outlook from “negative” to “stable”
LANSING, Mich. (WJRT) - Michigan’s credit rating received an upgrade this week, which Gov. Gretchen Whitmer said shows how the state is recovering well after the coronavirus pandemic.
S&P Global Ratings improved Michigan’s credit rating outlook from “negative” to “stable.” Whitmer said the change affirms that Michigan’s economy is heading in the right direction and will save taxpayers by lowering costs for borrowing money.
S&P says its rating boost reflects improved economic prospects and better than expected financial results.
“Michigan has emerged from the most recent recession better than originally anticipated, with a monthly unemployment rate currently below the national average, after initially being much higher; strong demand for its manufacturing products, particularly as vehicle sales have grown; and smaller draws on its rainy-day fund than initially expected,” S&P Global Ratings said Wednesday.
The last Consensus Revenue Estimating Conference determined Michigan’s projected $3 billion deficit for the 2022 fiscal year due to revenue losses from the coronavirus pandemic actually reversed into a projected $3.5 billion surplus.
“This credit rating boost, the second we have received in the last month, is a sign of growing confidence in Michigan’s communities and small businesses,” Whitmer said. “Thanks to our early efforts to respond to COVID-19, we are poised to emerge from the pandemic stronger than ever and continue our economic jumpstart.”
Her administration is working with the Michigan Legislature on plans for about $22 billion of federal COVID-19 relief funds allocated to the state and most of the 2022 fiscal year budget, which starts Oct. 1. Lawmakers passed a $17 billion school aid budget this week.
“With billions in federal stimulus and our $3.5 billion state budget surplus, we have a tremendous opportunity to raise wages, invest in schools and small businesses, and uplift families,” Whitmer said. “I look forward to continuing my collaboration with legislature, local communities and small businesses to put Michigan first.”
Michigan has an AA rating from S&P for general obligation bonds and an AA-minus rating for appropriation debt and building authority bonds.
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