PIERRE, S.D. – Last week Standard & Poor Global announced that it has reaffirmed South Dakota’s AAA Issuer Default Rating with a stable outlook.
“By sticking to conservative budget practices and keeping our reserves at 10 percent of our annual budget, South Dakota continues to benefit from the highest rating possible from S&P,” said Gov. Dennis Daugaard. “It’s been hard work to achieve AAA status during my time in office. I am very proud to say that not only have we been able to reach this status, but we have also been able to maintain it.”
In the report, S&P reflects on the state’s expanding and diverse economy, strong economic trends, well-funded pension system, low debt, strong level of reserve funds, and our conservative and balanced budget requirement as key reasons for reaffirming the state’s AAA. The state general fund budget for fiscal year 2018 ended with a $16.9 million surplus, from both lower expenditures and higher revenues than budgeted. S&P has reported a stable outlook for the state’s fiscal year 2019 with structural budgetary alignment and strong economic metrics.
S&P awarded the state a AAA rating in 2015. Fitch reaffirmed the state’s AAA rating for a third time last month and Moody’s is expected to renew the state’s ratings next month.
Credit ratings give potential bond purchasers a measurement of state performance and credit worthiness. Upgrades typically allow issued bonds to carry a lower interest rate, providing interest savings to issuers as well as the State of South Dakota and taxpayers.
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