SAN FRANCISCO — Standard & Poor's has raised Alaska's general obligation debt rating to AAA from AA-plus because of a change in the state's financial management methods.

"Alaska's economy and state finances are highly resource dependent, with approximately 90% of its general fund revenues being oil-related," Standard & Poor's analyst Gabriel Petek said in a statement. "But, recognizing the volatility inherent in an oil-based economy, the state's financial management has adjusted by using methods to, in our view, significantly mitigate the downside effects of oil price declines."

The agency also raised Alaska's appropriation-backed certificates of participation to AA-plus from AA and its moral obligation-backed debt to AA from A-plus. All have stable outlooks.

Petek said the state has several layers of financial flexibility it could exploit before needing to tap budget reserves. They include pre-funding around 20% of its annual operating budget and using cash for a significant part of its capital needs. The state is also ahead of the pension reform curve, according to Petek.

In addition, Alaska has the untapped ability to levy sales or income taxes.

"We were very upfront in making sure the rating agencies understood our reasons for proposing changes to the current tax structure," revenue commissioner Bryan Butcher said in a statement. "We believe we have the resources in place to successfully make those changes."

Petek said Alaska has also consistently underestimated oil prices, underlining its conservative budgetary approach. The state is on track for a budget surplus of $2.1 billion, according to Standard & Poor's.

Moody's Investors Service rates Alaska's general obligation bonds Aaa. Fitch Ratings gives the state a AA-plus.

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