comptroller seal Texas Comptroller of Public Accounts

FOR IMMEDIATE RELEASE

October 1, 2015

Comptroller Glenn Hegar Confirms State of Texas Gets Highest Marks From Major Credit Rating Agencies

(AUSTIN) — Texas Comptroller Glenn Hegar today said the major credit rating agencies have confirmed the state of Texas' long-term general obligation credit ratings, once again earning it the highest possible marks from Moody's (Aaa), Standard and Poor's (AAA) and Fitch (AAA).

Maintaining the highest credit ratings translates into lower borrowing rates for state-issued obligations — and lower costs to taxpayers.

"Texas' continued high ratings are due in part to the state's diverse economy and sustained economic strength, notwithstanding falling oil prices," Hegar said. "Another key factor is Texas leadership's focus on issues that affect the state's long-term growth, balance sheet and budgetary structure — impacts that extend well beyond a two-year budget horizon."

Standard and Poor's praised the state's economy, which it said "continues to perform more strongly than that of the nation as a whole, as characterized by its strong employment growth, relatively low unemployment, and a significant increase in state per capita personal income."

Fitch said Texas' rating "reflects its low debt burden, conservative financial operations and a growth-oriented economy that has outpaced national averages throughout the current expansion."

According to Moody's, Texas' rating reflects "the strong fundamentals of the Texas economy; a rainy day fund that provides a healthy budgetary cushion; and low bonded debt levels. Those strengths are offset by low oil prices that could challenge the state's economy, above-average pension liabilities and ongoing structural pressure to balance the state's finances as it seeks to maintain education and property tax relief spending amid high population growth."

"A critical component of any credit rating is the knowledge, ability and willingness to address items that may arise," Hegar said. "During my recent visit with the credit rating agencies, I reinforced Texas' history of making tough decisions for the long-term benefit of the state. I'm pleased that Texas has maintained its credit ratings, yet I also realize that we must be as vigilant as ever in upcoming legislative sessions to address our long-term fiscal challenges in a timely and effective manner."

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