Governor Seeks Changes to Bond Rating

Governor Phil Bredesen is in New York City this week for his annual meeting with credit agencies in the hopes of raising the state’s bond rating.

The rating affects the interest rates for the state when it borrows money, and also affects the perception of the state’s economy.

Bill Fox is director of the University of Tennessee Knoxville’s Center for Business and Economic Research, and he also is on the state’s funding board, which releases the revenue estimates for the budget every year.

Fox says the fact that the rainy day fund this year is at its constitutionally mandated level of 5-percent of the budget will help the rating. But Fox says that’s not Tennessee’s only strength.

“They’ll look at the trend of revenues, they’ll look at the trend of expenditures that is the, not just what’s happening at this instant, but the pattern and certainly we’ve made significant improvements in terms of the expenditures committee to TennCare. We’ve seen very rapid growth in revenues over the last year and so both of those will point very positively.”

Tennessee lost its triple-A status in 2000. Rating agencies had given the state a negative outlook until 2004.

Bredesen could get an extra boost in his effort to raise the ratings from revenue numbers released today, showing the state collected 97-million dollars more than it budgeted for.