When I first told Mississippi that protecting our credit rating would be one of my top priorities, we had no idea what was about to happen to our economy. We didn’t expect a global pandemic at that time, nor did we anticipate that so many Mississippians would find themselves out of work as commerce ground to a virtual halt. Especially in this economic environment, I was incredibly proud to be able to keep my promise to you: We maintained a strong double-A rating across the board in 2020.
A credit rating is the state government’s equivalent of your credit score. As is true when getting a car loan or securing a mortgage, the higher your score, the more access you’ll have to capital and lower interest rates.
Even a few points on your personal credit score can save you hundreds on a car or thousands on a home. For the state government, a strong credit rating saves taxpayers millions. That’s why it was so important we protect Mississippi’s standing, especially during these trying times.
The process wasn’t easy, but we were able to prove to credit rating agencies that because of our strong budgetary controls and responsibly managed rainy-day fund, Mississippi could pay our bills now and into the future.
In the report from Fitch Ratings (one of the three big credit rating agencies), it was noted that Mississippi has “strong control over spending and maintenance of reserves” regarding operating performance. Also noted by Fitch is that “Mississippi has strong financial resilience that should allow it to absorb the immediate budgetary effects of the economic downturn, based on its strong budgetary controls, a $556M rainy-day fund, and access to CARES Act funds for additional spending related to the pandemic.”
Weeks after securing an AA/Stable rating from Standard and Poor’s, a Aa2/Secure rating from Moody’s Investors Service, and an AA/Stable rating from Fitch Ratings, Governor Tate Reeves and I refinanced some of the state’s debt. The deal we struck saved taxpayers $36 million.
As State Treasurer, I have a responsibility to do more with every taxpayer dollar spent, regardless of the economic environment in which we find ourselves. While the world doesn’t look the same as it did when I was sworn into office in January 2020, I am incredibly proud that the promises made back then have been kept today.
The Dispatch Editorial Board is made up of publisher Peter Imes, columnist Slim Smith, managing editor Zack Plair and senior newsroom staff.