Bangkok--22 Jul--Standard & Poor's
Standard & Poor's Ratings Services revised the outlook on its 'AA' issuer credit rating (ICR) on Idaho and its 'AA-' underlying rating (SPUR) on the Idaho State Building Authority's outstanding debt reflecting the state's appropriation obligation to stable from positive. At the same time, these ratings were affirmed. The outlook change reflects personal income tax and sales tax declines associated with the current recession that, should they continue, would require increasingly challenging budget decisions starting in fiscal 2011 including the possible elimination of programs and draws on reserves.
The state's credit strengths, in our opinion, include: its economy that has diversified via growth in trade and services sectors; legislatively-created reserves outside of the general fund; build up of a very strong financial position on a GAAP basis through fiscal 2008; and constitutional limits on general obligation debt and a well-funded pension position.
The ICR reflects the state's full faith and credit, and the state's appropriation rating reflects the state's pledge of lease payments subject to annual appropriation as part of its annual budget process.
"We believe that the state's build-up of reserves during the most recent period of economic expansion has positioned it to absorb revenue losses in the current downturn and avoid abrupt changes to its service portfolio for the current fiscal year," said Standard & Poor's credit analyst Chris Morgan. "We also note that the state scaled back spending during fiscal 2009 and has budgeted for additional expenditure reductions in fiscal 2010 to offset continuing revenue pressures associated with the recession. But should the pace of employment losses continue, we think that the state will face more difficult budgetary choices in fiscal 2011"
High-tech manufacturing, particularly in the Boise area, was, until recently, a driver of economic expansion, but its most prominent member, Micron Technology, reduced its workforce by 1,100 employees in 2007 and announced this year that it intends to cut another 2,000 by August 2009. Agriculture, which tends to be associated with seasonal employment, continues to serve as a key economic anchor for the state, and food processing remains the state's second-leading manufacturing employer.
Media Contact:
Ana Sandoval, New York (1) 212-438-5095, [email protected]
Analyst Contacts:
Chris Morgan, San Francisco (1) 415-371-5032
David G Hitchcock, New York (1) 212-438-2022
Key Contacts:
Americas Media Relations: (1) 212-438-6667
media_ [email protected]
Americas Customer Service: (1) 212-438-7280
[email protected]