PIERRE, S.D. (AP) _ A national credit rating agency’s decision to upgrade South Dakota to the highest rating it issues means the state will likely save money in the future, and the efforts behind the shift institutionalize solid financial practices, Gov. Dennis Daugaard said Monday.
New York-based Standard and Poor’s cited the state’s “consistently strong” financial position and record of “conservative budgeting” in upgrading the state from an issuer credit rating of “AA+” to “AAA.” South Dakota joins 15 other states that have also been given the agency’s highest rating, which has been a key priority for Daugaard.
The agency also said its stable outlook on South Dakota reflects the state’s positive revenue trends, strong gross state product and personal income growth compared to the rest of the nation.
Credit ratings give potential bond purchasers a measurement of state performance and credit worthiness.
“I’m very, very pleased about this, and it’s something that most people won’t care about probably, or be interested in, but I think it’s nice when an objective outsider whose business it is to pay attention to these kinds of things upgrades us even as other states, even our nation, in the last decade have been downgraded,” Daugaard told The Associated Press. “I think that says we’re doing some things right.”
Daugaard’s office said upgrades typically allow issued bonds to carry a lower interest rate, providing interest savings to issuers such as the South Dakota Building Authority.
The governor said his administration has met with ratings agencies and has put forward policies and practices to help secure the upgrade. Some of those efforts include issuing an annual financial report more quickly and forecasting budget and capital expenditure projections over a longer period of time.
Daugaard said he hopes that Moody’s Investors Service, a different rating agency, will consider following Standard and Poor’s upgrade.