Hawaii's bond rating lowered as state finances dwindle
September 24, 2017 | 79° | Check Traffic

Top News

Hawaii’s bond rating lowered as state finances dwindle


Hawaii’s general-obligation bonds had their rating cut to Aa2 from Aa1 by Moody’s Investors Service, affecting about $5.1 billion in outstanding debt.

The downgrade to the third-highest ranking reflects Hawaii’s “strained financial operations following the recession-driven fall-off over the last several years,” Moody’s analysts Nicole Johnson and Nicholas Samuels said in a report today.

The latest projections for fiscal 2011 revenue is 1.6 percent lower than last year and 8 percent below the recent peak in 2008, the analysts said, reflecting in part the natural disasters in Japan that reduced tourism from that country.

The state faced a $539 million deficit for its 2012 fiscal year and $498 million for 2013, amounting to 10 percent and 8.6 percent of operating revenue.

The biennial budget was balanced with $652 million in revenue enhancements, such as the suspension of excise-tax exemptions and an increase in surcharges on car rentals.

Expenditure reductions totaling $777 million over two years included cuts in Medicaid services and public welfare. The state’s largest workers’ union agreed to a 5 percent pay reduction and increased health-care contributions.

The state’s reserves, as high as 20 percent of revenue following the 2001 recession, show a negative balance for 2010, the Moody’s statement said.


No comments
By participating in online discussions you acknowledge that you have agreed to the TERMS OF SERVICE. An insightful discussion of ideas and viewpoints is encouraged, but comments must be civil and in good taste, with no personal attacks. Because only subscribers are allowed to comment, we have your personal information and are able to contact you. If your comments are inappropriate, you may be banned from posting. To report comments that you believe do not follow our guidelines, email commentfeedback@staradvertiser.com.