AUGUSTA (AP) – Wall Street sees no reason to change the rating of Maine’s bonds. In a report issued just before the state sells nearly $103 million in bonds, the three rating agencies say Maine finances are stable.

Standard & Poor’s and Fitch Ratings are keeping Maine’s general obligation bonds at AA stable, while Moody’s Investors Service is retaining the state’s Aa3 outlook stable rating.

The ratings have an impact on interest the state must pay when it borrows money by issuing bonds. As of the end of 2007, Maine had an outstanding tax-supported debt of nearly $814 million in bonds and other obligations. General obligation bonds account for less than half of the total.

Voters on June 10 will decide whether to authorize bonds worth nearly $30 million more. The bonds are for natural resource, agricultural and transportation infrastructure.

The new bond rating announcements come in advance of the state Treasury’s sale of $102.7 million in general obligation bonds. Sales Friday and Monday will be restricted to retail purchasers, and on Tuesday the sale will be open to institutional buyers, Treasurer David Lemoine said.

In its rating statement issued Wednesday, Fitch referred to state laws that set expenditure limits while increasing state education funding and authorizing property tax relief. It said that while revenue forecasts have been revised to reflect tax relief and slower economic growth, the state has taken steps to consolidate school administration and correctional services.

“Maine’s economy has expanded from its traditional industries of manufacturing, natural resources and tourism with gains in the trade and the education and health services sectors offsetting losses in manufacturing,” the Fitch report noted.

In its report Thursday, Moody’s noted that the Legislature had to resolve a $190 million gap in the biennial state budget earlier this year. It acknowledged the state’s efforts to rebuild balances and control costs while increasing public school spending.

“Growth in service sector employment has helped maintain positive job growth in Maine over the past two years although the pace of gains continues to trail the nation,” Moody’s report said.

But it listed among Maine’s “credit challenges” a lack of options to address unexpected budget shortfalls, fiscal uncertainly left by citizen’s initiative activity, and economic growth that lags behind the national pace.

AP-ES-05-15-08 1611EDT


Only subscribers are eligible to post comments. Please subscribe or to participate in the conversation. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.