S&P lowers Oklahoma’s bond rating amid revenue failure

OKLAHOMA CITY – One of the nation’s major ratings agencies is downgrading Oklahoma’s bond and appropriation debt rating because of continued weak revenue collections and a revenue failure that’s led to more budget cuts to state programs.

S&P Global Ratings issued a report on Wednesday that lowered the state’s general obligation bond debt rating from AA+ to AA. The agency also lowered its rating on the state’s appropriation debt from AA to AA-. The ratings agency kept its outlook on the state’s financial picture as stable, but warned Oklahoma’s reliance on one-time sources of revenue to balance the budget makes the state vulnerable to further revenue declines.

The decision amounts to a lowering of the state’s credit rating and could lead to higher interest rates on the state’s bond debt.

“This report highlights several things that we’ve been saying for some time now,” said Secretary of Finance, Administration and Information Technology Preston L. Doerflinger. “We need to fix the structural budget deficit and our revenue problem.”

“Today’s announced downgrade of Oklahoma’s credit rating should come as no surprise to anyone who follows state finance,” said State Treasurer Ken Miller. “During my time as treasurer, other state leaders and I have worked to draw attention and action to solve the state’s structural budget problems cited in the downgrade statement.

“Perhaps the critique of Oklahoma’s revenue problem coming from an independent, nonpartisan and credible third party will finally spur action to correct the revenue imbalance,” Miller said.