Standard & Poor’s Ratings Services has lowered Alaska’s credit rating on general obligation debt from AAA to AA-plus, along with listing the state’s outlook on all debt ratings as negative.
The agency cited continued low oil prices that have exacerbated the state’s $3.5 billion budget deficit.
Standard & Poor’s says the credit rating may decline further if Alaska’s legislators do not enact “significant fiscal reforms” to address the budget deficit this year.
The agency says Alaska’s financial assets include options that have the potential to stabilize its credit quality.
Governor Bill Walker called the action “concerning and premature,” since lawmakers do not reconvene to deal with the budget during the 29th Legislature until January 19.
He added that it does however show the immediacy which the budget needs to be addressed.
Alaska’s rating was upgraded by Standard & Poor’s from AA-plus to AAA in 2012.
*Infographic courtesy of PEW charitable trusts.*