Moody’s upgrades Pa.’s credit rating, cites state’s fiscal management and economic growth

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Citing “sound fiscal management,” balanced budgets, and “steady” economic growth, Moody’s Ratings has upgraded Pennsylvania‘s credit rating to Aa2 from Aa3, Gov. Josh Shapiro announced Tuesday. 

The upgrade from Moody’s marks Pennsylvania’s second credit rating upgrade in two years. Fitch Ratings upgraded the commonwealth’s credit rating last November to ‘AA’ from ‘AA-,’ and a rating outlook upgrade from S&P Global Ratings improved Pennsylvania’s outlook to “positive” from “stable” while affirming its A+ long-term rating. 

“Under my Administration, Pennsylvania has received two ratings upgrades in our first two years – a testament to our responsible fiscal stewardship that sets the commonwealth up for success in the future while making critical investments in our economy and our workforce today,” Shapiro said in a statement. 

“Pennsylvania has the only divided legislature in the country, but we’ve shown two years in a row that we can come together to pass balanced budgets that invest in Pennsylvanians, grow our economy, and create real opportunity for people all across the commonwealth,” added Shapiro. 

Pennsylvania now has its highest credit rating since 2013. The rating upgrade is in anticipation of Pennsylvania’s plans to sell $1.4 billion issuance of new money, and $238 million refunding, planned for mid-October. In addition, the upgrade raises the possibility of additional taxpayer savings after last year’s upgrade resulted in a bond sale that produced millions in savings. 

According to a release, Moody’s upgrade acknowledges Pennsylvania’s diverse economy and strong fiscal management as strengths for creditworthiness. 

Moody’s also raised ratings for several state-backed financial obligations, including: 

• Appropriation-backed debt upgraded to Aa3 and A1. 

• Pennsylvania School District Intercept Program rating upgraded to Aa3. 

• Pennsylvania General Municipal Pension System State Aid Program rating upgraded to A1. 

• Pennsylvania Turnpike Commission’s $983 million Motor License Fund-enhanced bonds upgraded to Aa3. 

“Pennsylvania is clearly on a strong path toward continued economic and financial success,” said Secretary of the Budget Uri Monson. “Our responsible investments and sound management are keeping the commonwealth on solid fiscal footing while providing critical support to Pennsylvanians.”