Standard & Poor’s last week revised its outlook to stable from negative on Ohio in light of the state’s recent economic stabilization and the structural balance achieved in its new two-year budget.

The rating agency also affirmed its AA-plus rating on Ohio’s general obligation bonds. It also revised the outlook to stable on various appropriations bonds issued by the state and affirmed their AA rating.

Like many states, Ohio has started to enjoy modest growth in its revenues over the last several months.

Other bright spots include its long track record of aggressive fiscal management, a diverse economic base, and moderate debt levels with rapid amortization, analysts said.

Challenges include the possibility that the economic recovery is slow enough to continue to pressure the budget and the state’s overall diminished fiscal flexibility, analyst Robin Prunty wrote in a report on the outlook revision.

“The outlook revision reflects the state’s progress in moving toward structural budget balance through fiscal 2013 and the modest economic recovery underway, which has stabilized revenues and allowed for a contribution to the budget stabilization reserve fund,” Prunty said.

Moody’s Investors Service maintains a Aa1 rating and negative outlook on Ohio’s GO debt. Fitch Ratings rates the state AA-plus with a stable outlook.

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