COLUMBUS Ohio s worsening economic woes prompted one of Wall Street s three large credit-rating agencies Monday to revise the state s long-term credit outlook downward from stable to negative.
However, Fitch, for now, has maintained the state s credit rating at a strong AA-plus for any state long-term borrowing backed by state tax and general revenue, a nod, it said, was due to the state s fiscal restraint in the face of a decidedly ugly economic picture.
"The state s recent forecast changes anticipate a worsening economic downturn and sharply lower revenues going forward, posing a further challenge to maintaining fiscal balance," reads a Fitch statement. "Future credit determination will be tied to the extent of economic fallout and the related fiscal impact to the state."
The New York-based Fitch noted particular concern over Ohio s dependence on auto assembly plants and related parts manufacturers.
The state relies on long-term general obligation bonds, typically repaid over the course of two to three decades, for construction and other projects. A downgrade in its credit rating would greatly increase the state s borrowing costs.
Ohio and other states are heavily banking on some help coming from a federal economic stimulus package that Congress has been asked by President-Elect Barack Obama to have waiting on his desk when he is sworn into office on Jan. 20.
Ohio is projecting a $641 million shortfall in the current fiscal year to end June 30 and a projected hole of $4.7 billion over the course of the next two-year budget that already anticipates a 10 percent reduction in state spending from already reduced levels.