BRADENTON, Fla. - Mississippi's economic base has continued to expand with the help of legalized gambling and proactive recovery efforts since hurricanes Katrina and Rita impacted the state in 2005, a Standard & Poor's credit report released Thursday said.
The state's AA general obligation rating and stable outlook reflect the state's improving financial position, active response to rebuilding following the hurricanes, and strong conservative fiscal policies, tempered by a moderate but increasing debt burden, said the report authored by analyst Paul Jasin.
Mississippi has $3.1 billion of general obligation debt and $437 million of notes outstanding. Approximately $1.1 billion of legislatively authorized debt remains unissued.
While the state has experienced a recent positive overall revenue trend, as well as sound economic growth prospects due to hurricane rebuilding efforts, Mississippi still suffers from a relatively shallow economy compared to other states with sizable manufacturing sectors, as well as low wealth and income indicators, and high unemployment at 6.5%, Jasin said.
The state's economic base expanded over the years with an estimated 70,200 jobs created due to the legalization of gambling in 1992. Gaming accounts for nearly 10% of the state's total tax revenues.
"The industry's future in Mississippi, however, had been uncertain due to the extensive damage caused by Katrina and competition from other states," Jasin said. "But the state's aggressiveness in calling a special session to address concerns over rebuilding has spurred rapid reconstruction."
Jasin said Standard & Poor's stable outlook reflects the state's relatively stable economic base and "our expectation that officials will make the necessary budgetary adjustments to achieve a structurally balanced budget and maintain reserves despite recent softness in revenues due to lagging economic conditions."
The state's GO bonds are rated AA by Fitch Ratings and Aa3 by Moody's Investors Service.