If the Legislature fails to pass an operating budget before the start of the new fiscal year on July 1, it will be the first time in our state’s history this has happened.
It takes a lot of time and dedication to build a good reputation but it takes only one bad choice to destroy it in an instant. As state treasurer, I carry this lesson with me every day as I work with other state officials and dedicated treasury staff to manage our state’s finances in a prudent and productive manner.
Unfortunately, our state’s reputation and credit rating are being put at risk as the budget stalemate continues in Olympia.
Nationally, Washington state has an excellent reputation for managing its finances. We have one of the most diverse and robust economies in the country. According to a recent ranking, Washington’s economy ranked first among all 50 states. The study ranked the states based on economic activity and health as well as innovation potential. Washington was the only state to rank in the top four in all three categories.
Washington’s capital construction and transportation infrastructure financing costs are at near record lows because of already low national interest rates combined with our solid financial reputation and high credit rating.
State credit ratings are assigned by the major rating agencies. If our rating is downgraded it increases the interest rate we pay on new debt. Since 2012, Washington has borrowed (or refinanced) between $2.2 billion and $4 billion annually, so any change in interest rate can be very significant. Our state’s high credit rating is determined by several weighted factors — one of which is prudent governance. This is one factor over which the Legislature has considerable control.
If the Legislature fails to pass an operating budget before the start…