Massachusetts ended its fiscal year with a $116 million surplus that enabled it to increase its stabilization, or rainy-day fund, by 20%.
The commonwealth made $273 million worth of rainy-day deposits in fiscal 2012 to bring its balance to $1.65 billion. Colin MacNaught, assistant treasurer for debt management, said the net deposit exceeded projections of a few months ago by $115 million.
Massachusetts ranks third in the country for such balances, according to the National Association of State Budget Officers, ranking it behind Alaska ($13 billion) and Texas ($5 billion). The Alaska and Texas totals are estimates.
"I think it speaks volumes to bondholders of the commitment of state leaders to continue to strengthen the commonwealth's balance sheet," MacNaught said in an interview after the commonwealth released its statutory basis financial report for the fiscal year ended June 30.
According to MacNaught, Massachusetts has maintained its reserves at an average balance of nearly $1.5 billion over the past 10 years. "We take our credit responsibilities very seriously and maintaining sizable reserves are a big part of that equation," he said.
The bond rating agencies have also taken notice. In September 2011, Standard & Poor's raised the commonwealth's general obligation rating to AA-plus after Massachusetts deposited $300 million of its previous $460 million surplus for its reserve fund. Fitch Ratings also assigns AA-plus while Moody's Investors Service rates them Aa2.
"The commonwealth has shown a commitment to reserve funding," Fitch said in a September report.
Massachusetts will release its comprehensive annual financial report in December.