Mississippi's Bond Rating Downgraded to "Negative"

Last night, Geoff Pender at the Clarion Ledger reported that Mississippi's bond rating has been downgraded from "stable" to "negative." 

You don't have to know much about economics to understand that a "negative" rating for Mississippi is not good for the state, yet just two years into complete Republican control of Mississippi's government, here we are.

And this is just a warning. According to Pender, Fitch Ratings (no relation to State Treasurer Lynn Fitch), things could be worse, and quickly if we don't turn ourselves around:

While the agency did not drop the state’s credit rating from AA+, it warned, “The rating may be lowered if the state is unable to consistently fund ongoing operations without relying on one-time revenue sources, if there is weakness in the economy that diverges from the national trend, or if funding for pension liabilities weakens.” A drop in credit rating would cost the state millions in interest rates for general obligation bonds, and can be a turnoff for major economic development projects.

Fitch cites "volatile" industries,  "above average liabilities," and the usual suspects of high poverty/low employment as the chief concern causing the downgrade.

Perhaps the most telling statements come from the Republican leadership's own mouths. When asked about the rating, Lieutenant Governor Reeves said, "...there has not been the political will to do anything about it. I don’t know if that is changing or not..."

On the State Legislative side, Speaker Gunn had a similar pitch to Pender:

“We cannot declare (the recession) is over. We may have seen the bottom and stopped going down, but it’s gradual growth. One economist I heard said it could be 2018 before we see substantial improvement.”

This might be a good time to remind you of MSGOP chairman Joe Nosef's August 28th interview with the Clarion Ledger:

Unlike the nation here in Mississippi the economy is strong. Mississippi's economy totaled more than $100 billion for the first time. Since taking office, Phil has announced the creation of 7,298 new jobs and more than $1.1 billion in private sector investment to date. Have announced 4,659 of those jobs in 2013. 2012: 2,674 new jobs (plus 400 retained jobs), $455,560,000 in company investment. White taxes and regulations are going up in Washington, the Governor has taken both of those in opposite direction. Obviously though there is much more to do and progress to make. I think he thinks about that all the time and I talked to him this morning about some projects he is excited about.

So who owns this problem?

Rep. Steve Holland: Issue the bonds and fulfill our obligations

The following is a Letter to the Editor from Rep. Steve Holland (D - Plantersville):

I continue to lament the reality that the leadership of the 2012 Legislature failed to allow a compromise on issuing bonds for the myriad of critical needs our State has. Almost without exception in the last 29 years that I have been privileged to serve in the Mississippi Legislature, we have fulfilled what I consider to be a valid annual responsibility in budgeting–that of issuing bonds to build and repair buildings on our University and Community College campuses, provide economic incentives for prospective industries and grow existing businesses, provide fire trucks for fire fighting and prevention for volunteer departments, build bridges in rural counties over our creeks and waterways, enhance the growth and development of our small municipalities, build cultural tourism–and the list goes on. The State is no different than we as individuals and families are in this category. We rely on long term credit to purchase our homes, buy the necessities of our families and promote the well being of our quality of life.  

Never in the history of lending has interest rates been lower and never has there been a better time to get on with the needed growth and development of our State’s infrastructure. The needs are inarguable. And you will pay as citizens one way or another. A classic example is the ever increasing burden on middle class Mississippians with tuition increases at our Institutions of Higher Learning. Why, even buckets were strategically placed throughout your Capitol Building in Jackson to catch the rain from its leaking roof this year!! Approximately $240 Million in Bonded indebtedness was retired this year-a significant figure. We could renew at least this amount and make a tremendous stride in meeting so many of our State’s critical needs. 

Call Governor Phil Bryant (601-359-3100), Lieutenant Governor Tate Reeves (601-359-3200), Speaker Phillip Gunn (601-359-3300) and your local Senator and Representative and tell them you want what’s best for Mississippi - you want real leadership, not campaign rhetoric - in securing a more stable and inviting quality of life for all Mississippians. Tell them to get on with the needed business at hand immediately.

Well said, Rep. Holland.