Fitch drops credit rating on Maine bonds
The credit rating service Fitch Ratings has downgraded its assessment of Maine's state and local bond debt and moved the rating outlook for the state from stable to negative.
Fitch downgraded its rating on the state's $472 million in general obligation bonds from "AA+" to "AA" and dropped its rating on the $1.4 billion of the Maine Municipal Bond Bank's General Resolution bonds from "A+" to "AA-."
The ratings service reported the drivers for the move include continued budget gaps as a result of revenue shortfalls and rising Medicaid costs.
The analysis of the state's credit profile cites the state's weak reserve levels and limited options in addressing budget problems.
However, the ratings also noted strong points in Maine's economy, including a low debt ratio and frequent reviews of economic forecasts to adjust to changing conditions.
More broadly, the ratings characterized the state's economy as slowly growing but stable, citing "weak demographic trends" as a challenge for the state.
The Legislature's appropriations committee is set to begin reviewing how to make $35.5 million in curtailment order cuts to the current budget today. The committee will then take up Gov. Paul LePage's proposed $6.3 billion budget.
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