Standard & Poor’s Global Ratings has lowered Oklahoma’s various debt ratings one notch due to high public indebtedness and falling revenues.
The lowered ratings means that the state will pay more in interest for debt service.
“This report highlights several things that we’ve been saying for some time now,” said Secretary of Finance, Administration and Information Technology Preston L. Doerflinger. “We need to fix the structural budget deficit and our revenue problem.”
S&P lowered general obligation bonds and appropriation debt backed by the state’s credit enhancement reserve fund one notch from AA+ to AA and the state’s appropriation debt from AA to AA. S&P also assigned its AA- rating to the Capitol Restoration Project bonds.
According to the report, Oklahoma has tax-supported debt of $2,100,000,000.00, about $532 per capita. S&P explained that future ratings could drop or rise depending on what actions are taken to improve Oklahoma’s structural budget deficit:
“In the absence of meaningful structural reforms that align revenues and expenditures and that do not materially depend on one-time budget solutions or measures that carry significant implementation risk, we could lower the ratings,” the report states. “A recovery in economic indicators, improvements in state revenue performance that we view as sustainable, and growth in reserves could lead us to raise the ratings.”