Former Gov. Mitch Daniels' Newsroom

Contact: Jane Jankowski
Phone: 317/232-1622

For Immediate Release: Jan 24, 2006
State's credit rating improves to AA+

INDIANAPOLIS (January 24, 2006) ? Standard & Poor?s Ratings Service has upgraded the state?s credit outlook to ?AA+? from ?AA?, reflecting Indiana?s improved financial position. Standard & Poor?s (S&P), an independent credit rating service, issued its report January 23.

This is the first time Indiana?s credit rating has been at AA+ since 2002. It means, for example, that 227 school corporations across the state can borrow money at a lower interest rate.

?This is proof positive our program of recovery from bankruptcy is moving ahead strongly. Our policy of being careful with tax dollars and paying down our debt to schools is being rewarded with lower interest rates and further savings to Hoosier taxpayers,? said Governor Mitch Daniels.

The S&P report said the new administration ?has continued to demonstrate a commitment to building reserves and reimbursing the delayed payments. The state formulated its first, balanced biennium budget in 10 years, and has now closed the deficit that was projected in the first year, and has been able to maintain expenditure growth within budgeted parameters.?

The report cited the governor?s directive to repay $156 million, or half, of the debt owed to K-12 schools from tax amnesty proceeds. Schools will receive that payment by February 1.

The report also cited the state?s improving economic environment that translates into tax revenue growth; the biennium budget that will add to fund balance by the end of the biennium; and low overall debt levels.

The full report is posted on Standard & Poor?s Web site at:, click on credit ratings.

State rating history since 1997: December 18, 1997 to January 18, 2002, AA+ stable; January 18, 2002 to January 20, 2004, AA+ negative; January 20, 2004 to June 29, 2005, AA stable; June 29, 2005 to January 23, 2006, AA positive; beginning January 23, 2006, AA+ stable.