Major Credit Monitoring Agency Gives WA State A Negative Rating

When it comes to government and political financial ratings, there are credit ratings and 'health' reports. Now WA State has a negative in one of the important categories.

  Moody's Downgrades the State to Negative

Several types of financial health are rated by these agencies, for states and the Federal government.

Moody's, considered one of if not the top agency, says WA State's reliance on budget 'gimmicks' and unreliable revenue fixes have downgraded the state's financial health.

   State Treasurer Issues a Dire Warning

According to The Chronicle online, Democrat State Treasurer Mike Pellicotti said:

“A check engine light just flashed on our state finances. Credit rating agencies have warned for years that reliance on reserves to balance an otherwise structurally imbalanced budget could result in a negative credit action.”

Moody's issued warnings about the state spending more than what it takes in, especially with the last two budget cycles, then using reserves and raiding other areas of the budget to pay for needless projects.

   How Does This Affect the State?

Moody's best rating for a state is Aaa.  If dropped to Aa1, which is likely if the spending continues, WA state will face noticeably higher interest rates when it comes to issuing state bonds. States issue bonds, and make money off the interest. That in turn, is usually used for reserves and some capital projects.  The lower a state's credit rating, the more its finances become unstable.

 Reckless Spending is the Primary Culprit

WA state's budget reserves have dropped from $2 billion last year to just $558 million this spring.  Reckless spending has led to the declines.  According to The Chronicle:

"Democrats, who hold majorities in both chambers, wrote and passed the budget. To balance it, they siphoned $880 million from the state’s rainy day reserves and transferred $375 million from the Public Works Assistance Account, which provides low-interest loans and grants to local governments for infrastructure projects."

GOP Legislators and critics call Gov. Bob Ferguson's budget gymnastics a "house of cards."