From Kentucky Public Radio’s Tony McVeigh
Two national bond-rating agencies have fired a financial warning flare over the bow of Kentucky state government.
In January, while formulating his budget recommendation, Governor Steve Beshear met with bond rating agencies in New York.
At that time, no change in the state’s rating outlook was expected. But now, in the wake of the 2008 legislative session, two agencies, Moody’s Investor Service and Fitch, have revised downward from “stable” to “negative,” the outlook for state-supported bonds.
State Finance Secretary Jonathan Miller says it’s just a warning, because, for now, the state’s bond ratings remain unchanged.
“They blamed in on the lack of any meaningful pension reform and on the fact that we are balancing the budget with one-time money and there are no new streams of revenue,” Miller said.
He adds that if the state’s financial condition does not improve, the Commonwealth could be put on a watch list, meaning a rating change is likely. Miller says the administration is closely monitoring the situation.