BOSTON (AP) - A national agency has downgraded Massachusetts’ bond rating, citing the state’s failure to rebuild its rainy day fund.
S&P Global Ratings said Friday it notched down the rating on the state’s $22 billion of general obligation bonds from “AA+” to “AA.”
The agency also pointed to the state’s “tendency to experience revenue volatility, elevated debt levels, and below-average pension funded ratio.”
The agency said the state’s reserves peaked at fiscal year 2012 levels, declined through 2014, and stagnated.
Republican Gov. Charlie Baker said the state has made progress in paying down long-term obligations, like the unfunded pension liability, and ending the practice of drawing down reserves to pay operating expenses.
In his budget plan for the 2018 fiscal year, Baker has proposed depositing $98 million into the rainy day fund.
Please read our comment policy before commenting.