Fitch Warns Wisconsin of Possible Downgrade on $4B of GOs

Shields, Yvette
March 2003
Bond Buyer;3/27/2003, Vol. 343 Issue 31802, p3
Trade Publication
Fitch Ratings Inc. warned Wisconsin on March 26, 2003 that its credit on 4 billion dollars of general obligation debt faces a downgrade because the state's proposed budget relies on more than 1 billion dollars of one-time revenue gains and optimistic revenue growth that would require a strong economic rebound to achieve. The news was not unexpected by state debt officials. The proposed 2003 – 2005 budget relies on a growth rate of 5.7 percent in the income tax in the first fiscal year and 7.25 percent in the second, and growth in the sales tax of 4.1 percent in fiscal 2004 and 4.9 percent in the second year of the budget. Despite a series of cuts and revenue infusions, including the one-time infusion of 1.3 billion dollars of cash from the state's sale of its future tobacco settlement payments last year, the state faced a 400 million dollar deficit in the current biennial budget early this year after revenues were revised downward.


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