As the Daily Mail pointed out yesterday, Moody’s Investors upgraded the state’s bond rating. As I’ve opined before, how could this happen if the state has a debt “crisis” due to OPEB? The reason is quite simple. West Virginia’s long-term OPEB liability is just one of numerous factors that Moody’s uses to determine our credit score.
Why is our bond rating important?
Here’s Governor Manchin: “The higher bond rating means that West Virginia, including local school
boards, can obtain money to finance major projects, such as
infrastructure, at a lower interest rate. This will enable the state to
do more at a lower cost and thus will have a positive impact on water
and waste water projects as well as certain types of economic
development ventures. The ratings suggest that the state’s bonds are
more attractive and stable for investors, which means that West Virginia
taxpayers get a better deal on the money the state borrows.”
As Clinton administration adviser James Carville once said: “I used to think if there was reincarnation, I wanted to come back as the president or the pope or a .400 baseball hitter. But now I want to come back as the bond market. You can intimidate everybody.”
The most interesting part of Moody’s report was that it said our credit weakness was our state’s “above average concentration in the coal industry.” Let’s hope others read this.
On a different note, the state ended with a surplus of $90 million at the end of FY2010. Like we said earlier this was entirely predictable.
We have a great newsletter, join below: