Wednesday, February 21, 2007

Ohio's fiscal outlook rated negative

Moody's cites tax cuts, weak manufacturing

February 21, 2007

COLUMBUS - A major Wall Street credit-rating agency has lowered Ohio's long-term fiscal outlook to negative, a move that could be a precursor to a lowered credit rating.

Moody's Investors Service lowered the state's outlook from stable to negative, citing Ohio's ongoing tax cuts and weakening manufacturing sector. The state's credit rating, however, remains at Aa1, the second-highest possible.

Moody's took the action just as Ohio was preparing to go to the bond market today to borrow $250 million as part of its ongoing school construction and renovation program.

Just last week, Gov. Ted Strickland, preparing his first budget proposal, had cited the high credit rating as a bright spot in the state's weak revenue picture, helping to save the state millions in interest when it comes to bonds for schools, roads, bridges, and other projects.

He will propose a two-year transportation budget today that is dependent on long-term bonds largely guaranteed with gas-tax revenue. More....

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