Third major ratings agency downgrades Alaska credit

Construction on the Capitol building in Juneau on May 24, 2016. Photo: Rachel Waldholz/APRN
Credit ratings agencies have cited Alaska’s $3.8 billion budget deficit and ongoing legislative gridlock in downgrading the state’s credit. Lawmakers were unable to pass a budget in the constitutionally-mandated 121-day regular session, and are currently meeting in a special session called by Gov. Bill Walker. Construction on the Capitol building in Juneau (shown here on May 24, 2016) has forced that work into temporary quarters. Photo: Rachel Waldholz/APRN

The third major credit ratings agency has weighed in on Alaska’s fiscal health.

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New York-based Fitch Ratings announced¬†Tuesday morning¬†that it is lowering the state’s long term credit rating from AAA — its highest rating — to AA+, citing the state’s massive budget gap.

It follows downgrades earlier this year from the other two major ratings agencies, Standard and Poor’s and Moody’s Investors Service.

The credit downgrades will make it more expensive for the state to borrow money in the future.

All three agencies have said they expect Alaska’s rating to slip lower if oil prices remain low and the state continues to rely solely on savings to cover the deficit.

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Rachel Waldholz covers energy and the environment for Alaska's Energy Desk, a collaboration between Alaska Public Media, KTOO in Juneau and KUCB in Unalaska. Before coming to Anchorage, she spent two years reporting for Raven Radio in Sitka. Rachel studied documentary production at the UC Berkeley Graduate School of Journalism, and her short film, A Confused War won several awards. Her work has appeared on Morning Edition, All Things Considered, and Marketplace, among other outlets. rwaldholz (at) alaskapublic (dot) org | 907.550.8432 | About Rachel