Mississippi warned about bond rating outlook - MSNewsNow.com - Jackson, MS

Mississippi warned about bond rating outlook

Posted: Updated:
JACKSON, MS (Mississippi News Now) -

Mississippi is being warned! If the state doesn't change the way it spends, the bond rating will be dropped.Mississippi still has a AA+ bond rating. It's the rating outlook that's gone from negative to stable.

Dipping into rainy day funds and using too much one-time money are reasons why credit rating agency Fitch Ratings is putting Mississippi on notice.

"I'm a little surprised at the timing of this," said Lt. Governor Tate Reeves. "The reality is the budget in which we're currently operating, we actually have less one-time than we've had in a long long time in our budget."

One-time money can come from different sources. Money from the BP settlement or federal stimulus are examples. Bottom line, it's dollars that are available just one year at a time and sometimes used for recurring expenses, like workers' salaries.

"You've got to stop using one time money to plug your budget and the previous administration did that repeatedly," said House Speaker Philip Gunn. "This is the result of that."

Gunn says the all-Republican leadership has reduced the use of one time money from $550 to $175 million since they've been in office. That's why he says they'll keep following the track they were on before the rating outlook changed.

"This is not going to be the end of the world," added Gunn. "We're going to get this fixed. And we're working on that now."

While Lt. Governor Tate Reeves isn't happy to see the "negative outlook" label, he knows the state has built-in road blocks that rating agencies notice.

They've always been concerned about the fact that our per capita income is towards the lower of all 50 states and so the underlying economic environment is a challenge," explained Reeves.

Details of the rating pointed to unemployment still below the national average and growing pension costs. Still, Reeves believes the state's in good shape.

"We're making some corrective actions which we hope will get us back to a stable outlook," Reeves explained.

The Legislative Budget Committee is currently working on finalizing their recommendation for next year's budget. They will take the warning into consideration.

Copyright 2013 MSNewsNow. All rights reserved.

Powered by WorldNow