(Host) The state of Vermont got some good financial news this afternoon.
For the first time in 35 years, the state has received a triple-A credit rating from a leading Wall Street bond rating agency.
State Treasurer Jeb Spaulding says the upgrade could save the state millions of dollars in lower interest payments in the future.
VPR’s Bob Kinzel reports:
(Kinzel) The last time the state of Vermont received a AAA credit rating from Moody’s – one of the leading bond agencies in New York – was back in 1972.
Richard Nixon was about to be re-elected as president and Deane Davis was finishing up his second term as governor.
This is the highest rating offered by Moody’s and Vermont now becomes just one of 11 states in the country to achieve this ranking.
State Treasurer Jeb Spaulding says the upgrade has a practical impact for all Vermont taxpayers:
(Spaulding) “The bottom line is it reduced the state’s borrowing costs and the higher the credit rating the lower the interest rates we get anytime we borrow money so over the years Vermonters are going to save millions of dollars in interest costs that could be spent on meeting pressing needs or perhaps putting money back into the pockets of Vermonters but in any case it won’t be spent on interest to large financial institutions.”
(Kinzel) Spaulding says the upgrade is also a great economic development tool to encourage certain types of companies to locate in Vermont:
(Spaulding) “It is a badge of fiscal responsibility and stability that is recognized around this country when you’re AAA rated you’re in very rare company and I think the business community particularly the financial services sector which is an area that we’ve worked hard to attract in Vermont will recognize this AAA rating.”
(Kinzel) Governor Jim Douglas, who served as state Treasurer between 1994 and 2002, says there are several key factors that helped Vermont win back its AAA credit rating:
(Douglas) “The tremendously reduced debt burden going from one of the highest loads on a per capita basis in the nation a number of years ago to below the median now secondly the full reserves in our operating funds General, Transportation, Education and case load reserve.”
(Kinzel) Treasurer Spaulding says the higher credit rating will also lower interest costs for cities and towns whenever they take out bonds.
Spaulding is also hopeful that the upgrade by Moody’s will lead to higher ratings from two other leading Wall Street bond agencies.
For Vermont Public Radio I’m Bob Kinzel in Montpelier.