Tuesday, May 2, 2017

S&P is worried about Mississippi.

Standard & Poor's issued the following press release about Mississippi's financial condition.

NEW YORK (S&P Global Ratings) May 1, 2017--S&P Global Ratings revised its outlook on the State of Mississippi to negative from stable. At the same time, S&P Global Ratings affirmed its 'AA' rating on the state's general obligation (GO) debt outstanding, secured by Mississippi's full faith and credit; its 'AA-' rating on Mississippi's issues secured by state appropriations; and its 'A' ratings on various issues of the Mississippi Development Bank based on the state's moral obligation pledge. S&P Global Ratings also affirmed its 'AA-' ratings on various issues of the Mississippi Development Bank Community and Junior College State Aid Intercept Program and the Mississippi State Aid Capital Improvement Bond Program based on the intercept and withholding provisions of these state enhancement programs.

The 'AA' rating on Mississippi's GO debt reflects our view of the state's:

Strong budgetary and governmental framework, with a statutory requirement to adopt and maintain a balanced budget throughout the fiscal year; Historically conservative and proactive fiscal management, including making timely budget adjustments to maintain fiscal balance through periods of revenue decline; and Working cash stabilization fund, which still represent a good 5.0% of budget, but could fall to 3.4% in fiscal 2017 if revenue shortfalls continue based on legislatively approved levels.

Credit factors that somewhat mitigate the preceding credit strengths include our opinion of the state's:

Relatively limited economy, which trails many national median indicators and has a higher dependency on federal government spending compared with other states, stagnant population growth, above-average unemployment,
some concentration in manufacturing, below-average wealth and income indicators, and one of the nation's highest poverty rates and lowest educational attainment levels; and Moderately high debt burden across several measures as well as a relatively low and declining average pension-funded ratio.

"The outlook change reflects our view of continued weakness in the state's revenue trends and relatively slow economic growth, and our expectation that Mississippi could continue to experience budget pressures as it manages through budget reductions and the incremental revenue loss from the scheduled implementation of recent tax changes," said S&P Global Ratings credit analyst Sussan Corson. "The negative outlook also reflects the declining trajectory of the state's pension-funded ratios, which are likely to require future increases to pension contributions in an already tight budget environment," Ms. Corson added.

While we view the state's history of proactive fiscal management positively, including making budget adjustments to maintain fiscal balance through periods of revenue decline, we believe continued weakening of key state revenues and slow economic growth could pressure ongoing structural budgetary balance and reduce currently good reserve levels. We recognize Mississippi has taken a balanced approach to making recurring budget cuts and using nonrecurring transfers from the rainy-day fund; however, we believe that continued economic and revenue weakening could create future budget pressures. Should spending or revenue pressures result in significant reliance on the working-cash stabilization reserve or other nonrecurring measures, as well as continued deterioration in pension-funded ratios and Mississippi's commitment to funding pension contributions to meet its stated goals, we could lower the rating. Also, if financial flexibility is compromised due to the state's unwillingness to cut expenditures where and when needed or increased debt issuance occurs without a commensurate increase in liquidity, these could all lead us to lower the rating. If the state is able to manage through scheduled tax cuts while maintaining good reserve and liquidity levels and structural budgetary balance, we could revise the outlook to stable.

Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors, have specific meanings ascribed to them in our criteria, and should therefore be read in conjunction with such criteria. Please see Ratings Criteria at www.standardandpoors.com for further information. Complete ratings information is available to subscribers of RatingsDirect at www.globalcreditportal.com and at www.spcapitaliq.com. All ratings affected by this rating action can be found on the S&P Global Ratings'public website at www.standardandpoors.com. Use the Ratings search box located in the left column.


Anonymous said...

Obviously, the report will be revised in light Senator "Cochran's" latest press release.

Anonymous said...


Anonymous said...

...limited economy,..... has a higher dependency on federal government spending compared with other states, stagnant population growth, above-average unemployment,.... below-average wealth and income indicators, and one of the nation's highest poverty rates and lowest educational attainment levels......

In other words, we've been saying if you don't like our heritage and way-of-life, then leave! And anybody that possibly can, does!

Wave that flag baby! And pass some more of that heritage.

Rep. Tim Miles (D-FB) said...

Rushes to post this on Facebook while ignoring the bolded print...

I've got great credit - I'm just really bad at math said...

1:33 - This doesn't have anything to do with that, does your credit score increase if you win the lottery?

Anonymous said...

this is a downgrade. Results from lack of economic growth and that results from poor education, backwards culture (don't want to work and do not value education) and yes, the flag issue. The flag issue is symbolic.

Our governmental structure also keeps us back. Everyone is elected.

Anonymous said...

Well said, 1:50. And very true. The current flag, as an example, needs to be revered - in a museum. Think jobs... think of companies outside of MS that might want to expand operations and come here creating new and badly needed jobs. But these companies can choose any of the other 49 states whose flags are not so divisive. SC comes to mind. My ancestors fought on the side of the Confederacy too. But we need to move on. Sadly, Phil and Tate and the rest don't get this - or they are so spineless that any potential legislation dealing with flag change never sees the light of day. I know, we voted. Well, let's vote again. Time change and people do too.

Anonymous said...

this state has fallen so far behind during the current governorship it isn't even funny anymore. and i voted for haley b twice...

Anonymous said...

I believe that if a flag vote were held today, the outcome would be different than in 2001.

To change the flag, we have to have an alternative. Change it to what? The flag with the tree? That awful Stars and Bars ripoff that was proposed 16 years ago? Something new?

Come up with a flag to vote for and then get Phil to allow a vote. It won't do a damn thing for the state's credit rating, though.

Anonymous said...

1:46, obviously you didn't bother to read the print; or maybe you didn't get past the 3rd grade gate. But the negative issues in this report are not those that exist because of "republicans in office" but the systemic demographics of the state which if any party can be blamed for the condition would be democrats. Truth be known, though, it a historical economic condition that isn't going to be solved in our lifetimes - all we can hope for is a stemming of the tide to keep the decline from continuing.

Anonymous said...

Passage of the unconstitutional HB 1523 did its share of economic damage also as our reputation suffered. Another example of pandering politicians shooting us in the foot instead of doing what is right.

Anonymous said...

If you get me a list of 5 companies equal to or greater than Nissan(size/employees) that will put down operations in Mississippi as soon as we pull the flag, I myself, Rankin County white republican born and bred, will fall at the steps of the legislature and beg for it to be removed.

Anonymous said...

to 3:15pm...... "systemic demographics"...... my , what beefy terms you have. to bad us cotton choppers can't understand em. the only "growth industry " in mississippi is government. this state is a stinking third world country , except for the fact that 40% of its people are obese rather than skinny.

Anonymous said...

I agree, 2:48. The flag will do nothing in the short term for the state's credit rating. I believe that long term, though, it could. We need to be given the chance to vote - again. And I agree, the outcome will most likely be different than it was in '01.

Anonymous said...

My feeling is that removing the flag would be symbolic but would have little if any meaningful impacts on our economy. I have a suggestion...what if we take a step to remove something symbolic from our state( i.e. the flag) and then take an action that would actually benefit the state. I think this would be a win-win compromise. I am proposing that in order to reduce government dependency, that beginning in 2020 we cut all new dependency checks to unwed mothers in this state. Children born to unwed mothers amount to approximately 50% in our state. If you can't pay for them, don't have them. Maybe we could use these funds to maintain our infrastructure.

Anonymous said...

Cutting taxes and continuing to spend more than you take in. Maybe the next
Administration can solve this confounding puzzle that the current Gov, light gov
, and legislature can't figure out.

Plain ol' Catfish said...

@ May 2, 2017 at 1:50 PM

Amen!!!! Amen!!!!

Anonymous said...

Too late to remove the flag. The damage is done and is beyond repair.

Anonymous said...

The cycle never stops.....the benefit is supposed to be for the kid that has no say in any of this. So are you proposing 2:42 to take away the kid from the parent?

Anonymous said...

I call bullsh*t to anyone that says changing the state flag would have any short term benefits.

Let's look at the positives Mississippi does have to offer.

Great climate during the rest of the year aside summers.

We could host numerous events to start bringing in some much needed outside revenue. Considering our residents love to go elsewhere for entertainment.

With a number of hotels going up in the metro area - we have the ability to host NCAA super regionals in baseball, softball, and basketball.

As well as, we could host a bowl game in Jackson, call it the Magnolia Bowl and have Nissan, Brown Bottling, Southern Beverage sponsor the event.

Those are short term fixes. But they could do wonders for our brand.

Then once people from out of state, catch on and see there's a new Mississippi that's evolved from its putrid segregation past - we can keep our best and brightest in our own backyard.

Just change the damn flag! Why must Mississippi go kicking and screaming when change is for its own benefit?

We need to stop being procrastinators and we need to be ahead of the curve.

Anonymous said...

The obvious solution is that more tax cuts are needed.

Anonymous said...

2:27- Blaming the flag for poor score is bull. Nissan and Toyota came here under the present flag. The Mississippi Braves came here under the present flag. Yokahoma Tire recently opened in West Point, Airbus Helicopters is located in West Point, Navistar in West Point just landed $440 million US Army contract - ALL UNDER THE PRESENT FLAG!!! COSTCO is coming to Ridgeland UNDER THE PRESENT FLAG! I could go on and on. The flag is NOT a problem. You can't pretend history never existed. If you don't like the flag, either MOVE or stop looking at it. I don't ever remember a huge $$$ corporation coming out on television stating, "We refuse to locate in Mississippi because the state flag of Mississippi is our deciding factor in choosing a different state with a flag that has no attachment to state history."

Anonymous said...

The flag is a huge problem. Toyota and Nissan came here because labor is so cheap.....we were competing with Mexico and West Virginia!


Anonymous said...

How did this become a state flag issue? Could it be the Tots trying to divert attention from the real reasons S&P made their decisions?

Anonymous said...

4:24 I agree with you regarding the unwed mother situation. My feeling has always been that maybe the first baby is an accident but afterwards the mother should have figured out what causes babies and use the necessary precautions. I believe that birth control pills are now free. The second baby is not an accident and the mother needs to be prevented from having additional state sponsored children. No more baby money. Now for you flaming liberals out there in this audience, I am speaking across racial lines because I see fatherless (well, they have a father but not a daddy who helps care for them) babies of all races, colors etc. It didn't help that LBJ started the great society and all the welfare giveaways and the liberals told women to 'have those babies, we'll have the majority of the vote in time. Yes, I heard those speeches. I was an adult in the 60's. Politicians of all stripes are more interested in the vote and keeping their power than what is best for the people of this country. Heck, even the current Republicans have all 3 seats of power in D.C. and they tiptoe around special interest groups and giveaway too much. When Republicans didn't have power, they weren't afraid to vote to get rid of the disastrous health plan (ACA) because they knew that any repeal vote would be vetoed. Now the Republicans are afraid to do anything on healthcare. We don't need single payer insurance. And the previous health condition clause is something that they are afraid to get out of the bill. Let's assume Kingfish has Kingfish Casualty Insurance company and the law requires that he cover pre-existing conditions and I don't have insurance on my house and I call Kingfish one day and tell him that I want coverage on my house because it burned last night and I want him to pay for it. Now, you all know that would not be a prudent policy to write. Then after he pays me for my loss, I call him and tell him that I now want to cancel my insurance. I should stop now before I use too much of JJ's space. Oh and I have been a republican since the mid 60's. Y'all be good now.

Anonymous said...

6:49, it became a state flag issue because what else differs us from #'s 49,48 and 47? We have a dumb fat unhealthy state just like our surrounding neighbors. We just choose to go that extra step. Heritage!

Anonymous said...

Kudos to Phil, Tate, and Phillip!

Anonymous said...

Are we allowed to point out that we also have the highest percentage of African American residents of any State? Thus our economic outlook, or is that too politically incorrect?

Anonymous said...

Of course 8:00. Thats the group we brought over in chains and enslaved and after we freed them we kept them down in subpar schools and rigged the economic system against them. For about a hunert years. So yes, you should point out that on the internet that we have the most of those types of any state. A point of pride for many on this board. And a great excuse of our poor economic output.

The flag says....hell no we aren't coming out of the 1800s

Anonymous said...

I was at an event last night where a forty year old man told me he didn't go to an integrated school in Crystal Springs until he was in the 6th grade. Yep- blame the problems on the black folks.

Anonymous said...

What are you afraid of, 8:00? How many of those African Americans shape policies as members of state government?

Unknown said...

8:00pm- This is an interesting argument. Bermuda of course has the inverse demographics to Mississippi. 60% Black and 37%White and has a GDP per capita almost 3 times as much as Mississippi per capita. $85,457 US dollars per capita in a majority black country on this side of the hemisphere. Maybe we should study what Bermuda has done with so many black folks, rather than assume that demographics are destiny or that black folks can't be productive in a capitalist economy. As a black Mississippian that earns in top 1% in the population of the state (over 500k annually), I can tell y'all that all of us, black and white, are compensated relative to the skills we offer the market place. I am not offended by your core thesis which is that the African Americans brought to Mississippi by force are not well positioned to compete in a 2017 economy. Whether you believe this is because of genetic predisposition or if you believe this is because of environment, the maintenance of the status quo is not satisfactory. We either need to invest in the Mississippians we have or grow the population of those who have "the complexion for the protection" as my grandmother used to call it. The irony is that White folks from other places are the ones most offended by Mississippi's Flag. Black folks expect a Paleoconservative/Alt right posture from out state. My hope is that we can lock arms in this state and invest in our future both in terms of infrastructure both human and civic, benefitting ALL Mississippians. #wetoobroketoberacist #racismisforstatesthatcanaffordit

Anonymous said...

The current flag's days are numbered. It's on its way to a museum. Sensible people understand that it is divisive and presents the wrong image. It's not even allowed in the US Capital. We can live in the past or we can look forward. As an American whose ancestors fought on the side of the Confederacy, I will vote to change. And sooner or later, that change will come.

Anonymous said...

I'm surprised that the nobody mentioned that Tate cut taxes for his fellow rich folks which led to this predicament of less revenue.

Anonymous said...

Yall can vote all you want, the people of Mississippi will not change the flag, and the governor and legislature won't either.

Anonymous said...

3:15 pm You are apparently the one who doesn't read and when you do, you can't put what you read into any context. And, you clearly have memory problems or else you'd remember the fiscal boondoggles.
What is it about cutting spending more than you cut revenues that you don't understand?
And, for those of you who think it's the poor blacks increasing their population that is the problem, how about explaining how other states have managed to decrease that problem? You can look at specific demographics in economic reports.
The inability to acknowledge that to progress means cooperation rather than tribal and regional infighting and all of us aggressively dealing with poverty and poor education is the problem.
But, no...just go on blaming and attacking each other rather than solving problems.
That's worked so well,right?

Anonymous said...

If you want to blame the flag as the reason for low economic development, then you are, by default, blaming the "Black People."

The State Flag has nothing to do with this credit rating, the state finances, nor economic development in the state. The very people who are supposedly offended by the flag are the ones that are investing in the state. It's the others that have nothing to do with this state that's using it as a "false flag", pun intended.

Well-stated, 9:03.

"Tax cuts" are not responsible. We have increased tax revenues significantly and in return, increased spending significantly. Spending has to be reduced, just like I have to do in my household. And just because the state, or feds for that matter, instituted a spending program, doesn't mean it is right or just.

This country, from the local to the federal level, has to take a look at the government spending at each and every dollar. All government spending needs to be reset to zero and built upon a basis of what is needed to run government. Then we can spend 100+ years on ideological spending. Resent again, etc

Anonymous said...

Jim Hood will not win versus Tate Reeves.

Anonymous said...

@ Monica Lewinsky for Trump's VP (Great Screen name)

Thanks for your post. You make a valid point about investing in Mississippians. Too often, whether it be because of racism, greed, or indifference, the political and economic leadership in this state refuses to invest in the State's most valuable resources, its people. The leaders insist on keeping labor costs low by maintaining an insufficient and outmoded educational system so as to maintain a low skilled labor force. This cuts across racial lines and simply punishes poor people for being poor. Whether they are black or white, it really doesn't matter to the elites here. Simple racism only works to keep the poor masses from recognizing the true systemic evil that the leaders maintain.

The flag only symbolizes this deeper systemic evil. Until masses of Mississippians decide or learn that the status quo is not working to create a brighter future for the state, I fear that things will only get worse. "Mississippi Values" need to be redefined to mean that Mississippians value Mississippians above and beyond any ideology. We must stop running from education and history and use them to really understand our current state and chart a brighter tomorrow for our children, so that indeed the best and brightest will remain here.

Anonymous said...

@ 1:50.............................

Yea, change the flag and the money trees will replace the cotton.

Let's see how well those trees come up in New Orleans now that the confederate monuments are gone.

You're an idiot.

Anonymous said...

Blaming this downgrade on the flag is a joke. Not that I disagree that's it's an issue, but it's not the reason for the downgrade.

#1: The state economy is stagnant (and that's being generous) and primarily dependant on donations (i.e., government funding). Donations are shrinking (as they should....unless you're in favor of Uncle Sam continuing to print ourselves into bankruptcy) and state economies that aren't self-sufficient like ours are doomed.

#2: The state is ranked as one of the most corrupt. Local levels in particular are a joke. you don't need to look much further than our wonderful capital city, but they're not the only ones. Who would continue to invest in a state where there's so much waste and ineptitude?

#3: Our lack of investment in education is a disaster. Sure, there are a few pockets here and there, but as a whole Mississippi's education system wouldn't keep us competitive in Haiti.

So, while the flag issue is an embarrassment, it's not the core reason for the downgrade of the state's credit rating. there are "better" reasons for that. :-(

Anonymous said...

to 9:03.... your attempt to compare bermuda to mississippi is absurd. bermuda is a british crown colony with 64,000 people and is home to huge offshore investment industry that brings in more $ than has ever been made in the history of mississippi. when it comes to bermuda stick to short pants and grass cause you are a total idiot.

Anonymous said...

Blaming this downgrade on the flag is a joke. Not that I disagree that's it's an issue, but it's not the reason for the downgrade.
So, while the flag issue is an embarrassment, it's not the core reason for the downgrade of the state's credit rating. there are "better" reasons for that. :-(

There was no downgrade. Suggest you seek remedial reading comprehension help.

Unknown said...

8:32 You seemed triggered? You clearly have very limited experience with Bermuda. I really wish there was a cogent point in your argument, but since there isn't one...I would suggest you read more. Start with a book a month, then one a week, one day maybe you can work yourself up to a book a day so you won't sound so worthless on the JJ blog. I have a quote for you to think about before your response.

"What is grand is necessarily obscure to weak men. That which can be made explicit to the idiot is not worth my care."-William Blake

Anonymous said...

to 9.03 and may 4 at 8:02......hey big mouth , mr 500k per year, you just ratted yourself out to the IRS. how smart can you be??

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