LOS ANGELES — Standard & Poor's affirmed its AAA issuer credit rating on Wyoming, and its stable outlook, citing the state's economic strength in recent years.
State revenues have benefitted from past years' high commodity prices and mining activity, but S&P analysts said the state has been prudent in building very large financial reserves to meet cyclical swings and that those reserves are currently greater than annual expenditures.
S&P analysts anticipate continued low debt issuance, and believe factors such as the state's track record of prudent financial management help ameliorate the fundamental volatility of its extraction-based economy.
"The stable outlook reflects our expectation that, in the next two years, Wyoming will maintain conservative budgeting and forecasting practices, limited or no debt issuance, and very strong fund balances, despite cyclical elements to its economy and the drop in energy prices," said Standard & Poor's credit analyst David Hitchcock.
The state has experience above-average population growth, lower-than-average unemployment, and above average income levels, according to S&P analysts.
These gains were attained even though "the employment base has depended on the potentially cyclical mining sector, which could be vulnerable to recent declines in the price of oil, as well as agriculture, tourism, and governmental employment," analysts said in the Dec. 23 report.
The outlook assumes that the state will revise its consensus forecast for oil and energy prices during its regular updates as part of the budget and mid-biennium process. Possible downward rating pressure could come if a dramatic reduction in state reserves resulted from the drop in oil prices.
