Moody's Investors Service announced it is upgrading the state of Florida to its highest credit rating, citing "sustained" improvement in the state's economy and a "proven track record of rebounding from severe weather events."
The ratings agency said Thursday that the state’s finances have been "characterized by healthy reserves and historically strong governance practices and policies that are expected to continue.” It also noted the state's low state debt and pension ratios; job growth; and positive long-term prospects, despite its aging population.
"Florida's (Aaa stable) recovery from the great recession has been sustained and robust, with economic and employment growth consistently outpacing the US over the last five years and mitigating challenges posed by an aging population base,” the agency said. “We expect Florida's strong fiscal management practices and healthy reserves will allow it weather the impact of future downturns.”
The upgrade of the state's general-obligation debt to the Aaa stable rating comes a few months after the agency held Florida's already-high credit rating steady post-Hurricane Irma. Moody’s tied the state’s low debt and pension burden to its ability to manage its above-average risk for storm damage, and also noted in its report that the two major state-sponsored insurance and reinsurance entities "have built up strong claims paying resources and reduced exposure to future liabilities” amid a decade of largely quiet storm seasons.
Those two changes have reduced the burden on the tax base for paying for disaster damage, the agency said. The state’s stable economy and finances also "position it well for the challenge of adapting to longer-term climate trends.”
Gov. Rick Scott linked the state's improved rating Friday to his term as chief executive, touting lower unemployment rates, more than 1.54 million new private-sector jobs and a decrease of $9 billion in state debt. He has cited similar figures repeatedly during his time in office, which coincided with the end of the most severe portion of the recession.
“When I became governor in 2011, Florida’s economy was in terrible shape," Scott said in a statement. "Today’s rating from Moody’s demonstrates the success of Florida’s economic turnaround."
"The entire country should take note," added Scott, a Republican who is running for U.S. Senate against incumbent Sen. Bill Nelson, who is a Democrat.
Florida joins 14 other states with an Aaa rating from Moody's.
Among other changes, the agency also upgraded its rating on the state’s lease-appropriation debt by one rank, and the State Board of Education’s Lottery Revenue bonds was upgraded from A1 to Aa3. The total debt affected by the agency's rating is about $18.7 billion, the agency said.