November 19, 2007
 

OLYMPIA – The recent upgrading of Washington’s bond rating is good news for the state’s capital budget, according to Rep. Bill Fromhold (D- Vancouver).

“Bonds fund half of the total capital budget,” Fromhold said.  “A more favorable rating means the interest rate on the bonds is lowered, which saves the state money in the long run.”

Fromhold chairs the House Capital Budget committee.  Last session, the legislature passed a 2007-2009 biennial capital budget bill, HB 1092, which included increased investments in K-12 school construction, higher education projects, housing, natural resources and public safety.  The final budget, which passed both chambers nearly unanimously, was hailed as a bipartisan effort. 

“Together, we created a budget that delivers maximum benefits for the people of Washington,” Fromhold said on the House floor at the time.

Standard & Poor’s, a provider of independent credit ratings, upgraded Washington’s rating last week on general obligation and motor vehicle fuel tax bonds from “AA” to “AA+.”   It also upgraded its rating on the state’s certificates of participation from “AA-” to “AA.”  In a press release, the company stated that the raised rating, “…reflects the recent voter approval of a constitutional amendment requiring the state to establish and maintain a budget stabilization account.”

On November 6, voters overwhelmingly approved a constitutional amendment requiring the state to set aside a portion of tax collections each year in a budget stabilization account, also known as a “rainy day fund.”  Fromhold voted for the original bill, SB 5311, authorizing creation of the account.  Because it involved a change to the state’s constitution, the measure had to be put to a vote of the people in order to become law.

But it wasn’t just the rainy day fund that influenced S&P’s rating decision.

“The upgraded rating also reflects our state’s ongoing economic expansion, which is taking place despite the slowdown in the rest of the nation,” Fromhold said.  “S&P believes that even if future revenue forecasts are not as strong, we’re on solid enough financial footing for the immediate future.  This is good news for all Washingtonians.”

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For more information:

Rep. Bill Fromhold, 360-786-7924

Media staff contact:

Jennifer Zahn Spieler, 360-786-7201

Link to Rep. Fromhold’s website and print-quality image:

http://www.housedemocrats.wa.gov/members/fromhold/

Radio and TV News Directors:  To obtain broadcast-quality audio on this issue, or to arrange for TV or radio interviews, please contact Caucus Broadcast Coordinator Dan Frizzell at frizzell_da@leg.wa.gov or (360) 786-7208.