If Missouri’s state treasury earned a royalty every time a politician bragged about the state’s gold-standard AAA credit rating, the Show-Me State would be flush with cash.
The AAA credit rating (trademark pending) is what you make of it.
Republicans, when it serves their purposes, point to their decade in charge of the Legislature in ensuring the state can borrow money at the lowest rates.
Gov. Jay Nixon, a Democrat, points to his ability to cut the budget during tough times as being at least somewhat responsible for the rating. This week, the governor touted reports from the three agencies that issue the credit rating — Moody’s, Fitch and Standard & Poor’s — as yet another in his bushel of good reasons that lawmakers shouldn’t override his veto of House Bill 253. The credit agencies concur that the budget-cutting experiment would make it harder for state government to perform its necessary duties and thus could put its credit rating at risk.
What’s most interesting about this boast is that it comes a week after the state announced the official retirement of the Third State Building Bonds. The final payment on the $600 million in bonds that were issued between 1983 and 1987 was made last October. Last week the state closed up all the accounts, and put the left-over money (about $54,000) into the state’s general revenue fund.
The only reason to worry about bond ratings is if you issue bonds. Then you can build things like roads, bridges and schools and get low interest rates on those bonds. With interest rates at an all-time low, the state could get more bang for its investment buck right now than at virtually anytime in its history.
Investors who helped finance the bonds from the 1980s made good money on their long-term investment. They’d gladly pony up again in a state with a . . . wait for it . . . AAA credit rating.
Both Mr. Nixon and his friends on the Republican side of the aisle (many of them, at least) agree that issuing bonds to put Missourians to work makes sense, particularly with past bond issues being paid off. But they didn’t get a bill to do just that across the finish line this year because too many Republicans believe the fairy tale that the only way to grow the economy is to starve the government of money to do its job.
So here we are. For now, Missouri has a AAA credit rating. If only the state would use it for something.