Moody’s Gifts Fossil-Fuel States With Positive Credit Outlook

the falloff in state tax revenue to shifts in total unemployment.
(Chart: Moody’s)

Credit-rating agencies — particularly Moody’s and S&P, the
nation’s two premier shops — wield significant influence over the
financial health of private companies. But state and local officials are
often equally dependent on good credit ratings to borrow money for
transportation and infrastructure improvements.

Even the federal government monitors its credit outlook to a degree
that might surprise the average voter. When Moody’s suggested
last month
that the mounting deficit might imperil America’s AAA
rating (the highest available), Treasury Secretary Tim Geithner leapt
to the defense
of Washington’s fiscal health.

So which states do credit raters believe are weathering the
recession, and which will continue to struggle with yawning deficits
that jeopardize their ability to invest in transportation and
infrastructure? Bob Kurtter, manager of Moody’s state ratings team,
addressed the question last month during a speech at New York
University’s Institute of Public

Only two states, California and Illinois, have seen their credit
downgraded in recent months, Kurtter said. Negative credit outlooks have
been issued for 15 more states, and two are benefiting from positive
credit outlooks: West Virginia and Louisiana.

Why are things looking rosy for those two governments?

"They got buffered on the early part of this downturn" thanks to
their reliance on coal and oil production, Kurtter said. The two states
"both have very conservative administrations that have managed pretty

When states can reap credit gains by doubling down on fossil fuels,
it’s easy to see why coal- and oil-state lawmakers are resisting
legislative action on climate change. Take West Virginia Sen. Jay
Rockefeller (D), a longtime
of transportation reform who today
to block the Environmental Protection Agency from reining
in emissions for two years — a delay twice as long as what many
Republicans had

  • California is a big oil and gas producing state, but because we are the biggest oil producing state without an oil severance tax, we don’t reap as many of the benefits as states like Louisiana, West Virginia, Alaska, and Montana.

    Such a tax would improve our state’s woeful financial state, and could fund our transition to a post-fossil-fuel economy. I hope our legislature will defy the fossil fuel lobby and pass such a tax this year.



True Story: Ratings Agency Pins Dangerous Roads on Car-Free Young People

The financial ratings agency Standard & Poor’s has a new report out that presents a bizarre theory about dangerous conditions on American streets. It’s the Millennials’ fault, “but not in the way you think,” they say. Prepare yourself for some ratings agency clickbait! Standard & Poor’s blames Millennials not only for the poor state of transportation infrastructure but also the […]

States Already Licking Their Chops Over Newly “Flexible” Bike/Ped Funds

Just days after Congress passed a bill allowing states to spend funds supposedly designated for biking and walking on completely unrelated projects, transportation officials are already circling like vultures over that money. An AP story from Covington, Kentucky on Sunday quotes several transportation officials and executives parroting the GOP line that transportation enhancements funding, as that […]

The Big Question: What is the Purpose of Federal Transportation Spending?

With the White House’s agenda crowded by high-profile debates that remain unresolved after lengthy talks with Congress — think health care, financial regulation, even unemployment benefits — only a handful of lawmakers are publicly engaging with the dominant issues surrounding the next long-term federal transportation bill. (Photo: UVA) Within that group of lawmakers, however, there […]