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Feds Downgraded, Florida’s Outlook Improved

August 16th, 2011 by flanews

While the Federal Governments credit rating dropped, Floridas credit outlook improved. Standard and Poors revised the states outlook from negative to stable. The state is using the news to refinance its old debt and save millions of dollars, and as Whitney Ray tells us, Governor Rick Scott is using the states credit rating to attract new businesses.

Roads, school construction, and restoring the Everglades are just a few of the massive projects that the state borrows massive amounts of cash to finance. To date the state owes 23 billion dollars but efforts to refinance those loans are underway. Thats because Floridas AAA bond rating has improved from negative to stable.

S&P revised Floridas outlook in July. Since then Chief Financial Officer Jeff Atwater says the state has refinanced 1.5 billion dollars in bonds, saving 135 million dollars.

We went through got lower price, because a AAA bond rating can give us that. In this marketplace, there arent too many of us out there with that rating, said Atwater.

Floridas improved outlook comes as the Federal government credit rating is declining. And while Congress was arguing over the debt ceiling, Governor Rick Scott was talking to the rating agency about why he thinks Florida is a good investment.

I spoke to them over the phone, and I talked about the fact that we are going to be the most fiscally responsible state and conservative state in the country, said Scott. The fact we have been taken off of CreditWatch is a positive for business people.”

State budget cuts and tax reductions helped Scott convince S&P to improve Floridas credit outlook. The governor is using the same pitch on out-of-state businesses hoping theyll also consider Florida a safe bet.

While Scotts budget moves helped improve the states outlook, the reduction in property taxes is hurting some of Floridas water management districts. The South Florida Water Management Districts credit rating was downgraded because of layoffs that resulted from state budget cuts.

Posted in Economy, Rick Scott, State Budget, State News | 19 Comments »

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