Industry News
S&P Global Finds U.S. States’ Credit Stable in Uncertain Times
On January 4, 2024, S&P Global Ratings published its report, U.S. States 2024 Outlook: Credit Stability Endures in Unstable Times. In fiscal 2024, states are expected to experience slower economic growth and likely decreased revenues. S&P Global indicated that states’ credit fundamentals seem strong; however, the fiscal 2025 budget considerations will likely focus on managing increasing costs, lessening federal government support and potential tax policy changes that may further negatively affect revenues.
According to the report, “Through the pandemic, states maintained better funding discipline, which has resulted in an overall strengthening of the long-term funding progress and a lessening of the risks associated with statewide pension plans. Pension and other postemployment benefits liabilities are not evenly distributed by state, with many having well-funded statewide plans. Pension risks remain for some, though, and OPEB are largely being funded on a pay-as-you-go basis, meaning pension and OPEB funding and risk management will remain key components of our fixed-cost analysis.”
The report is available here.