AUGUSTA (AP) – One day after a Wall Street rating agency downgraded Maine, another agency on Friday reaffirmed the state’s standing at AA+.

The AA+ rating “reflects the state’s conservative financial operations and institutionalization of financial reforms, including accounting, its revenue estimation process and debt control, although economic weakening has caused financial pressures,” a Fitch rating release said.

Fitch said the state’s general obligation bonds “are well secured with strength especially in the low burden that debt places on resources and in the unusually rapid rate of amortization as all bonds mature within 10 years. Net tax-supported debt amounts to $709 million, or $557 per capita, 0.7% of full value and 2.3% of personal income, all lower moderate ratios.”

Fitch also said “longer term financial pressure may result if the June 2004 initiative is approved to immediately increase to 55% the state’s share of educational expenses, with an annual cost of $245 million.”

State Treasurer Dale McCormick attributed the Fitch decision to maintain Maine’s rating to prudence in the state’s management of fiscal matters.

“Fitch has recognized Maine’s low debt levels and commitment to improving our fiscal position and as a result has affirmed Maine’s AA+ credited rating,” McCormick said.

Standard & Poor’s dropped Maine’s bond rating by a notch on Thursday in advance of a scheduled state bond sale next week. As a result, Maine stands to pay more in interest on the $130 million in bonds up for sale.

McCormick said Standard & Poor’s lowered rating could translate into $150,000 in added interest.

Maine’s S&P rating dropped from AA+ negative outlook to AA stable outlook.

The state was placed on “negative outlook” status by S&P in November of 2002.

State officials said the primary reason for the “negative outlook” and the subsequent downgrade was the depletion of reserves, including the rainy day fund.

Moody’s Investors Service’s Aa2 stable outlook rating for Maine remains the same, state officials said.

State officials say roughly one-third of surplus funds will be directed at the end of the fiscal year into a budget stabilization fund and that more – 16 percent of surplus – will go to a working capital reserve.

AP-ES-05-28-04 1319EDT