Governor Phil Bredesen says the state will likely maintain – but not improve – its standing with the top three bond rating agencies. The Governor met with representatives of the three in New York City today.
The rating impacts how much interest the state pays on borrowed money. Tennessee has the second highest rating possible.
The agencies have previously been skeptical about Tennessee’s reliance on sales tax rather than state income tax. But Bredesen says officials now admit Tennessee’s tax structure is more stable in a weak economy.
“When you look at sales tax, franchise and excise tax and some of the other things out there, they have questions about them because they’re numerically-inclined people who do projections, and they want to know what we’re expecting. But I think the skepticism about the tax structure that was there in the first year or two has just gone away now. They see that this works.”
The state lost its triple-A rating about a decade ago. Bredesen says the state has resolved many of the issues that led to the downgrade and hopes to see the rating reinstated in five to ten years.
This year’s rating is expected to be released by the agencies in the next two weeks.
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