The state received strong credit ratings from two major ratings companies on Wednesday, showing potential investors that it is very likely to repay its debts.
Moody’s Investors Services affirmed its Aa2 rating — its third highest — for Maine’s general obligation debt, which is in the form of bonds to fund construction of public schools, highway systems and other projects. Moody’s also upgraded its outlook from “stable” to “positive.”
Moody’s also cited Maine’s growing employment rates and population. Last year Maine had the 11th highest net migration rate in the nation and the highest in New England.
S&P Global Ratings kept its AA rating for debt — its second highest — and its “stable” outlook.
The ratings assess the creditworthiness of borrowers. With the high ratings, Maine can more easily attract investors willing to buy bonds covering major projects.
S&P cited the state’s “good financial policies and budgetary management” and its “stable government framework.” Moody’s cited Maine’s “strong financial reserves” and said “the biennial budget for fiscal years 2024-2025 is structurally sound.”
Gov. Janet Mills has proposed a budget of about $10.3 billion over two years. B udgets are negotiated in late June and approved with two-thirds majorities. New estimates in late April from the state’s Revenue Forecasting Committee said Maine would likely see $294 million more in tax revenue through mid-2025 than previously anticipated.
Responding to the ratings, Mills said Maine’s budget is balanced, its Rainy Day Fund is at a record high of $911 million, the unemployment rate is at a record low, there are a record number of jobs and the state’s economy is strong.
“We will continue to invest in Maine people to build a stronger, more prosperous state, and we will do so while meeting our obligations and living responsibly within our means.”
