The State of Washington’s ‘AA+’ Long-Term Issuer Default Rating and GO bond ratings reflect the state’s broad and growing economy, with solid long-term revenue growth prospects, as well as the state’s demonstrated commitment to fiscal balance and long-term liabilities that place a low burden on resources. Revenue performance over time has exceeded U.S. GDP growth, and Fitch Ratings expects this to continue to support strong growth prospects. The state has complete independent control over taxation, with an unlimited legal ability to raise operating revenues as needed. Washington possesses ample expenditure flexibility, with statutory commitments, broad responsibility for education and infrastructure spending offset by low carrying costs. Washington also benefits from the broad expense-cutting authority common to most U.S. states. The combined burden of debt and net pension liabilities is low as a percentage of personal income but above the median for U.S. states. Debt ratios incorporate the funding of substantial capital needs, particularly for transportation, but are offset by a moderate net pension liability and an expanding economic resource base. Washington maintains very strong gap-closing capacity and budget flexibility with solid reserves. The state has prudently built up its fiscal reserves in times of economic recovery and expansion despite spending pressures linked to education and other pressing needs.
Thu 16 Nov, 2023