West Virginia bond rating drops a notch because of coal downturn
CHARLESTON, W.Va. – Standard & Poor’s has dropped West Virginia’s bond rating amid the coal industry’s downturn.
The agency announced the drop Thursday from AA to AA-minus. It also said the rating’s outlook is stable.
Standard & Poor credit analyst Nora Wittstruck said the downgrade was because of weakness in the energy sector – particularly, coal. The agency views the challenge as long-term, not cyclical.
Standard & Poor’s praised West Virginia for its Rainy Day Fund and for demonstrating willingness and ability to tackle large-scale financial challenges.
The agency cited progress addressing unfunded pension liabilities.
Amid falling coal and natural gas revenues, West Virginia still hasn’t passed a budget for the fiscal year beginning July 1.
The Republican-led Legislature and Democratic Gov. Earl Ray Tomblin are negotiating tax increases, cuts and use of reserves.