Texas Now Triple-A Across the Board

DALLAS -- Standard & Poor's Ratings Services upgraded Texas’ issuer credit rating to AAA from AA-plus, giving the state top ratings from all three credit ratings services for the first time.

Analysts cited the state’s financial strength during and after the 2008 recession that slowed some parts of the Texas economy but not the booming oil and gas business.

“We believe that the continued strength of the state's economy along with its budget management framework will provide state officials with significant budgetary flexibility to manage the service and infrastructure demands of a rapidly growing population,” said Standard & Poor's credit analyst Horacio Aldrete-Sanchez.

Gov. Rick Perry took the upgrade as another chance to disparage Washington on the eve of an expected shutdown of the federal government amid a Congressional impasse.  

“S&P's decision to raise Texas' credit rating to AAA is no accident, but further proof that the Texas model of conservative fiscal discipline is a key element of our strong economy, and a stark contrast to the out-of-control spending and rising debt ceilings of Washington, D.C.,” Perry said in a statement.  “In Texas, we adhere to the powerful combination of keeping taxes low and government spending in check, ensuring Texas remains the best place in the country to live, work, raise a family and build a business.”

S&P rates the United States AA-plus, after a 2011 downgrade from AAA.

The S&P action gives Texas top credit ratings from all three ratings agencies for the first time. 

Comptroller Susan Combs said she has been promoting the state’s credit amid budget surpluses and a rainy day fund that is expected to hit nearly $12 billion at the end of the current biennium.

“When I made presentations to the ratings agencies this summer my message was very clear,” Combs said. “Texas is a business-friendly state with a strong job market and a diverse mix of industries. These bond ratings reflect Wall Street’s confidence in the Texas economy, the state’s revenue growth and disciplined cash management and budgeting.”

Other ratings that will be raised following S&P’s upgrade of the Texas issuer rating include general obligation and appropriation debt issued by the following agencies:

- Texas Water Development Board;

- Texas Higher Education Coordinating Board;

- Texas Transportation Commission;

- Texas Public Finance Authority; and

- Texas Veterans Land Board.

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