For Immediate Release:
August 06, 2021
Ohio’s Bond Rating and Outlook at Highest Level in 42 Years
OBM Announces Robust Monthly Preliminary Revenue Data
(COLUMBUS, Ohio) – Office of Budget and Management (OBM) Director Kimberly Murnieks announced today that Fitch Ratings, citing the state’s superior financial resilience, affirmed the state’s Issuer Default Rating (IDR) at “AA+” and elevated the state’s outlook to Positive from Stable. The “AA+” rated (Positive) outlook indicates the state’s low default risk and is one notch below Fitch’s highest credit quality rating of “AAA.”
“Fitch’s decision to upgrade Ohio’s bond rating outlook to Positive is proof that the state of Ohio’s financial management is solid and our economy is surging forward. We took the hard and necessary steps to do what is right for Ohioans, and for our communities. And we are seeing results. Ohio is the first, and so far the only, ‘AA+’ rated state to have its outlook elevated to Positive by one of the three major ratings agencies since the pandemic began,” said Ohio Governor Mike DeWine. “Ohio is the best state to grow your career, to expand your business or to start a new one, and to raise a family.”
“An improved bond rating outlook is a message that Ohio is managed well, it is a great place to invest and has a bright future,” said Ohio Lt. Governor Jon Husted. “It’s just another piece of evidence that Ohio and the Ohio economy are strong as we emerge from the pandemic and prepare for the future.”
“This rating outlook change is strong third-party validation of Ohio’s robust financial position and of Governor Mike DeWine’s proactive management of the state’s finances and economy throughout the turbulent global conditions caused by the pandemic. The decisive actions taken by Governor DeWine starting in February of 2020 to protect Ohioans and control state government spending, prioritizing saving lives to save our economy, worked,” said OBM Director Murnieks.
The Fitch report states, “Outlook revision to Positive from Stable reflects Ohio’s sustained trend of balanced finances and growth in reserves that strengthens the state's financial resilience as it confronts cyclical economic and revenue trends.” The report further cites Ohio’s “superior financial resilience that allowed it to absorb the immediate budgetary effects of the economic downturn.”
The rating action is Fitch’s first change in 11 years when Ohio’s IDR was upgraded from “AA” to “AA+” in 2010. This action represents the highest rating level for Ohio’s IDR by any of the three main rating agencies since 1979.
In connection with the IDR update, Fitch also rated an upcoming issuance of $56.5 million State of Ohio (Treasurer of State) Series 2021A Capital Facilities Lease-Appropriation Bonds (Cultural and Sports Facilities Building Fund Projects) as “AA” Positive outlook and affirmed the ratings and revised outlooks to Positive on Ohio’s “AA+” General Obligation bond rating, “AA” on outstanding appropriation-backed bonds, the “AA” Ohio School District Credit Enhancement Program Rating, and the “A+” PPP Grantor Counterparty rating assigned to the Ohio Department of Transportation's Portsmouth Bypass project payment obligations.
The Fitch report citing Ohio’s superior financial resilience is available here.
Additionally, today OBM released the state’s July 2021 preliminary revenue data, which continue to illustrate the state’s positive economic momentum. Total General Revenue Fund tax receipts finished the month $24.7 million (1.3%) above the budgeted estimate.
- Non-Auto Sales Tax collections were $29.0 million (-3.0%) below the monthly estimate.
- Auto Sales Tax collections were $4.1 million (2.4%) above estimate in July, the fourteenth straight month in which that revenue category has exceeded estimate.
- Personal Income Tax collections were $14.0 million (2.2%) above estimate for the month.
- The Commercial Activity Tax performed above the estimate by $19.6 million (29.7%).
"As we begin this new fiscal biennium, the state of Ohio’s financial position is strong. To ensure our economic resurgence, we must continue Covid mitigation measures while protecting more Ohioans through vaccination. A healthy workforce builds the foundation for a vibrant economy,” said OBM Director Kimberly Murnieks.
A more detailed explanation of this data will be included in the Monthly Financial Report, which will be posted on the OBM website on Tuesday, August 10.