Montpelier, VT – Today, Treasurer Mike Pieciak announced that S&P Global Ratings (S&P) reaffirmed Vermont’s strong AA+ credit rating. AA+ is the second-highest rating that a state can receive.
S&P issued the new rating in connection with their updated criteria to better account for a state’s outstanding pension liabilities. The reaffirmed rating reflects the favorable progress Vermont has recently made in reducing its own pension liabilities.
“Vermont’s affirmed credit rating under S&P’s updated standards is a clear indication that we’re making real progress in funding the state’s pensions and ensuring a secure retirement for Vermonters who have dedicated their lives to public service,” said Treasurer Pieciak. “The reforms implemented by the legislature in 2022 have been key to this progress, and I’m grateful for the legislature’s tri-partisan commitment to sound fiscal management and reducing these liabilities over time.”
The report also credited Vermont’s stable financial outlook to the state’s responsible budgeting practices, disciplined governance, and historically high cash balances.
While S&P noted Vermont’s ongoing challenges, including a tight housing market, a weak labor force, and aging demographics, the rating agency believes Vermont could be on a path toward long-term demographic and economic growth. In 2020 and 2021, the acceptance of remote work and the state’s unique access to outdoor recreation led to an increase in high-income domestic migration.
To build on this progress, Pieciak says the state needs more housing. “More housing will attract young people and families to our state, strengthening our demographics, workforce, and economy. Our office remains committed to leveraging the tools at our disposal, like the 10% in Vermont program, to build more homes across the state and lower costs for working families.”
Vermont’s strong credit ratings ensure borrowing costs for state projects remain modest, reducing costs to Vermont taxpayers. This summer, the state’s Aa1/AA+ ratings enabled Pieciak and his office to successfully refinance outstanding higher-interest bonds, saving the state approximately $3.7 million.
Read S&P’s full report here.
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