Comment: What strong credit rating says about state, future

Moody’s top rating reflects on the state’s fiscal controls and will aid investment in infrastructure.

By Christine Rolfes

For The Herald

When New York-based rating agency Moody’s raised Washington state’s credit rating last month, it marked our state’s first upgrade in 22 years and the first time Washington earned the agency’s highest mark.

As one of the primary budget writers in the Legislature, I found Moody’s reasoning behind the upgrade — strong fiscal governance, healthy reserves and exceptional economic growth — a ratification of the many tough decisions we had to make in our most recent budgets. It was also a validation of the fiscal practices my Democratic colleagues and I have adopted since retaking control of the Senate in 2018.

And it was a further confirmation that Washington’s economy — from our innovative tech industry to one of the most diverse agricultural sectors in the nation — is creating a sustainable, robust cycle of economic activity.

Moody’s rating is critical because, much like individual consumer credit scores, the state’s finances and credit rating help determine how we fund major investments such as new roads, classrooms and community gathering places.

Moreover, our status among other elite states with triple-A credit ratings means we can make critical investments people need by securing financing with lower interest rates, as there is much less risk that the money will not be repaid.

That puts our state in a stronger position to complete robust projects around the state, whether it’s new infrastructure to improve salmon habitat or funding to construct a new behavioral health teaching hospital in Seattle over the next decade.

All of these projects are necessary to move our state forward, and our state’s strong fiscal health enables us to move even faster.

Moody’s report also noted that our credit rating hit the gold standard at the same time that the Legislature made historic increases in K-12 education funding in response to the McCleary decision. That’s something every lawmaker and resident should be proud of: squaring the critical needs of our state with a responsible, balanced budget.

The good news from Moody’s comes at a time when many economists are watching markets closely for signs of another recession. It has been a decade since the Great Recession forced lawmakers in Olympia to slash services and cancel projects around the state. For those of us who were serving in office at the time, that was long and painful stretch of history we do not wish to repeat.

Since then, we have not only recovered from the Great Recession, we have further fortified our state’s financial reputation and reserves — now $3.5 billion — to the point that our credit rating has reached its highest level in history.

As our economy continues to thrive, our primary challenge is to protect our fiscal health in the face of an uncertain global economy and the increasing impacts of climate change. We must be able to remain nimble through strong budget reserves, smart investments in the next generation, and strategic improvements that help make our communities and our natural resources stronger and more resilient.

State Sen. Christine Rolfes, D-Bainbridge Island, represents Kitsap County’s 23rd Legislative District and is chairwoman of the state Senate Ways and Means Committee.

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