07/28/2008
A report card to tape to the fridge
Indiana aces the final
I hope you didn't miss it.
In the midst of all the gloom and doom in the national media came an enormous boost to the state and some significant recognition for the Daniels administration. The state was upgraded this week by Standard & Poor's Ratings Service (S&P) from AA+ to AAA.
"So what," you say?
To most of us, an improvement from AA+ to AAA doesn't sound like much. Kind of like going from an A to an A+ on your report card. You were good last semester and now you're a teensy bit better. Right?
Wrong. Going from an AA+ to AAA S&P rating is huge. AAA is the highest rating awarded by the organization. This is the first time in history that Indiana has achieved such a rating and one of only a handful of states with this ranking. In addition to Indiana, only Delaware, Florida, Georgia, Maryland, Minnesota, Missouri, North Carolina, Utah and Virginia have a AAA rating.
Sounds nice, but what does this mean?
It means that state and local governments are eligible for lower interest rates if they apply for loans.
It means that 228 of the state's school corporations can borrow money at a lower interest rate.
It means that Indiana will increasingly be seen as a good place to do business.
It means that, if we continue to control spending, Hoosiers will ultimately enjoy lower taxes.
Here's what S&P had to say in its press release announcing the new rating:
NEW YORK, July 18, 2008 -- Standard & Poor's Ratings Services raised its issuer credit rating on the state of Indiana to 'AAA' from 'AA+', reflecting the strong management that has led to improved financial performance and position.
In particular, "property tax reform has realigned state and local spending, clarified the state's responsibilities, and is not expected to impact the state's long-term financial performance," said credit analyst Eden Perry. In addition, "budgeting practices have been strengthened under this administration," she said.
Other positives that the agency noted were:
- Indiana has a stable and diversifying economic base which is becoming less concentrated in manufacturing;
- Its fund balance will grow by the end of the biennium even as it gets caught on up delayed payments to local governments; and
- The state's overall debt is low.
Complete ratings information is available to subscribers of RatingsDirect, the real-time Web-based source for Standard & Poor's credit ratings, research, and risk analysis, at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com; select your preferred country or region, then Ratings in the left navigation bar, followed by Credit Ratings Search.
Source: Standard and Poor's
One final note
During the period from 1997 to 2005, S&P downgraded the state's credit rating three times. Since Gov. Daniels took over in 2005, the rating has been upgraded three times. Kudos to Gov. Daniels and his management team for a job well done in a challenging economic environment. It is hard to argue with this kind of success.
I'm taping this one to the fridge.
The rumor mill
Tilting at windmills -- Part 2
Previously, I told you about what was widely viewed as a quixotic independent campaign for governor by Sen. John Waterman. He needed to obtain 33,000 signatures by June 30 in order to appear on the November ballot. Waterman managed to collect just a little over 2,000 petition signatures -- a disappointing, if not embarrassing, outcome.
As a result, rumor has it that there are some looking to line up primary opponents for 2010, when Waterman runs for reelection to his Senate seat. Word to the wise: While he may have dreamt the impossible dream this time, I would think carefully before taking him on. Waterman is very popular in his rugged southern Indiana district.
Dates to remember
Oct. 7: NFIB/Indiana Leadership Council meeting. Skyline Club, Indianapolis.
Oct. 9: Last day to register to vote in the November elections.
And furthermore
Please give me your feedback. I enjoy hearing from you and I appreciate your comments. Thank you for being an NFIB member and for reading "Capitol Capers."
Barbara Quandt
NFIB Indiana State Director
317-638-4447
Barbara.Quandt@nfib.org
