A national credit rating agency has upgraded its assessment of the state’s fiscal outlook from stable to positive.
“We welcome this rating and will continue to work with the Legislature to keep Maine in a strong fiscal position,” Gov. Janet Mills said in a statement announcing the upgrade Friday.
Fitch Ratings also affirmed its AA rating on bonds issued by the state in its latest review of Maine’s fiscal health.
The upgraded outlook rating was attributed to “improved budgetary management,” which includes structural balanced budgets and a robust reserve fund. “Maine has made progress in restoring flexibility by rebuilding its reserves to historically high levels,” the rating reports said.
The upgrade comes after Maine has experienced a series of budget surpluses, resulting from stronger-than-expected consumer spending and sales tax growth, and strong employment driving up income tax revenues. The surpluses have allowed the state to fill its budget stabilization account, also called the rainy day fund, to the maximum allowed under state law, and to avoid borrowing for some one-time capital expenses, reducing the state’s debt.
Mills and lawmakers soon will negotiate another budget update based on a projected $265 million revenue surplus for the two-year period that began in July.
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