Fitch Rates Wisconsin $164.5MM 2008A GOs 'AA-'

NEW YORK--(Business Wire)--
Fitch Ratings assigns an 'AA-' rating to $164,535,000 in State of
Wisconsin general obligation (GO) bonds, 2008 series A, expected by
competitive bid on April 15. The bonds are due May 1, 2009-28. In
addition, Fitch has affirmed the rating on the state's $5.8 billion
outstanding GO bonds at 'AA-'. The Rating Outlook is Stable.

Wisconsin's 'AA-' GO rating recognizes the state's considerable
resources, moderate debt burden, and diverse economy. However,
employment growth has halted, tax revenues are underperforming
projections and the state legislature is meeting in a special session
to adopt measures to close the projected $416 million shortfall in the
biennium ending June 30, 2009.

A balanced budget for the current biennium, fiscal 2007-2009,
which was enacted almost four months late, centered on a tobacco tax
increase and expense reductions, some undefined at the time of
passage. The state faces pressures from increased medical assistance
expenses, a medical assistance transfer currently being litigated as
well as projected revenue shortfalls.

Although fiscal 2008 tax collections through February 2008 are
2.4% above the same period a year ago, they remain below the budgeted
fiscal 2008 growth of 3.8%. Individual income tax collections are
rising 2.6% over the prior year's level and sales and use tax receipts
are rising 1.7%; however, both are below estimated growth of 2.8% and
3.7%, respectively. In February 2008, the state projected a potential
cumulative revenue shortfall through June 30, 2009 of as much as $652
million. The state has taken some remedial actions including
increasing lapses, reducing the shortfall to $416 million. Other
balancing measures are being considered in the special legislative
session. Fitch will continue to monitor the state's progress in
addressing the budgetary gap.

The state's net tax-supported debt as of Dec. 15, 2007, including
outstanding general fund appropriation bonds, is $8.8 billion or 4.4%
of personal income, a moderate but above-average and rising debt
burden. GO bonds constitute about 57% of total tax-supported debt;
Excluding the general fund appropriation bonds issued for pension
funding, Wisconsin's debt burden drops to 3.6% of personal income.

Mirroring the nation, the state's economy has slowed. Employment
rose 0.5% in 2007, well below 1.1% for the U.S. February 2008
employment growth was almost flat, rising only 0.1%, compared to 0.7%
U.S. growth. Growth in the service sector is now cooling. Job losses
were posted in most major sectors from a year earlier. Unemployment
has remained steady at 4.9% over much of the last year, slightly above
the 4.8% U.S. rate. Since 2002, personal income growth rates have
lagged the nation. Preliminary 2007 personal income rose 5.3% from the
prior year, compared to 6.7% growth for the U.S. Wisconsin's personal
income ranks 25th among the states, down from 20th in 2002.

Fitch's rating definitions and the terms of use of such ratings
are available on the agency's public site, www.fitchratings.com.
Published ratings, criteria and methodologies are available from this
site, at all times. Fitch's code of conduct, confidentiality,
conflicts of interest, affiliate firewall, compliance and other
relevant policies and procedures are also available from the 'Code of
Conduct' section of this site.

Fitch Ratings, New York
Janet H. Martin, 212-908-0507
Douglas Offerman, 212-908-0889
Richard J. Raphael, 212-908-0506
or
Media Relations:
Cindy Stoller, 212-908-0526

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