Nixon projects $44M savings due to AAA credit rating

Missouri’s AAA credit rating is projected to save taxpayers $44 million in fiscal 2013, according to a news release from Gov. Jay Nixon’s office.

The state’s AAA credit rating has permitted a lower interest rate on state bonds in two separate transactions that would save taxpayers an estimated $44 million during fiscal 2013, the release said.

The reduced interest rates will allow the Board of Public Buildings – which oversees state facilities – to save an estimated $20.6 million, and the Board of Fund Commissioners – which issues, redeems and cancels state general obligation bonds – to save an estimated $23.3 million in fiscal 2013, according to the release.

Missouri has earned a “triple triple rating,” or an AAA rating, from all three credit agencies – Standard & Poor's, Moody’s and Fitch – since 1989 as a result of the state’s fiscal discipline, said Scott Holste, spokesman for Nixon's office.

“There’s a sense of fiscal discipline in Missouri state government that is certainly [due to] through our balanced budget, through paying our bills on time, and credit agencies recognize Missouri’s fiscal strength in that area,” Holste said. “So we get the highest rating and are one of the few states – especially in the Midwest – that’s had that credit rating from all three agencies.”

In turn, the top credit rating from all three agencies provides benefits for states, just as it does for consumers, which include reduced interest rates on bonds, Holste said.

“This is certainly an example of how our fiscal discipline pays off in that you are able to get a better interest rate on things like bonds,” he said.

Both boards have given preliminary authorization for refinancing, and the savings were assumed in the budget approved by the General Assembly, the release said.

In May, Moody’s reaffirmed Springfield’s credit rating of Aa1, according to Springfield Business Journal archives. The city’s credit rating was upgraded to Aa1 in July 2011 after 11 years of earning an Aa2 rating.[[In-content Ad]]