NASHVILLE - While calling Tennessee's credit rating "very important," Gov. Bill Haslam today sought to downplay the "likely" downgrading of the state's AAA credit rating in the event Congress allows the country to go into default.
On Tuesday, Moody's Investors Service said it would probably lower top credit ratings for Tennessee and four other states if the U.S. doesn't raise the federal government's $14.3 trillion debt ceiling.
"Regardless, the state of Tennessee will be in good shape," Haslam said, speaking to reporters. "I mean, I think we're in maybe one of two or three of the best financial shapes of any state out there.
"But," he acknowledged, "that impact on our debt would cause some increased interest costs or could, in some instances. So we're concerned about it, but not overly, because of the financial condition we're in."
The credit agencies rating of debt affects state and local governments' borrowing costs when issuing bonds.
In its news release, Moody's said the Volunteer State has several things going against it.
The state, for example, is sensitive to national economic trends compared to other AAA-rated states based on employment volatility.
And while Tennessee's state and federal politicians are fond of railing about federal spending, the fact is the state has, according to Moody's, an "above average" share of federal employees as a percentage of its workforce.
For complete details, see tomorrow's Times Free Press.