Opinions are like credit scores. We all got ‘em and they…vary, depending on a number of factors 🤪 LOL and maybe some of them stink. 📉💩
Did you know states have credit scores, too? 🧐 A company called Moody's is one of the institutions responsible for monitoring the financial outlook of both companies and governments. 🏦
This company recently updated PA's outlook from "stable" to "positive"...but is it really a positive? Let's find out.
Here’s Five Fast Facts on PA's rating upgrade:
- 🎉 Party Time? - According to Moody's, the Keystone State has a positive outlook rating based on a "significant increase in budget reserves over the past three fiscal years." So, money in the bank = better rating. Got it. Also, PA does have a pretty fat budget surplus and a decent chunk sitting in its rainy day fund (it's about $13 Billion depending on who’s counting)...
- 🥨 But Here's the Twist - …however, Moody’s didn't upgrade PA's credit rating (Aa3), which has been the same since 2014. Several neighboring states (New York, Ohio, and Virginia) all currently have higher credit ratings.
- 💸 Above Your Means - So why didn't they give the state a higher credit rating? Welp, PA's 2023-2024 fiscal year budget spends more than it brings in. If the trend continues, PA will have to dip into its reserves…and deplete them.
- 🫣 Short Changed - Speaking of overspending, PA's General Fund revenues for this fiscal year are falling way short…by $27.2 million as of the end of August.
- 👎 The Breakdown - On a national level, Fitch Ratings (another Moody's-type company) downgraded the Federal Government's credit rating. This is only the second time that's happened in our country's history.
🔥Bottom line: Governor Shapiro certainly has his work cut out for him. Getting PA's credit rating up would be a huge plus. Luckily, Shapiro knows a thing or two about turning budgets around. Let's see what happens. While we're on the topic of credit scores, this article has tips to keep your personal score in tip-top shape.
How's YOUR credit score looking these days?
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