Jan 22 Fitch Ratings downgraded its rating on
Maine's $472 million of general obligation bonds to 'AA' from
'AA-plus' because of persistent budget gaps and underperforming
Fitch also revised its rating outlook to stable from
In connection with the downgrade, Fitch also cut its rating
on $1.4 billion of Main Municipal Bond Bank's general resolution
bonds to 'A-plus' from 'AA-minus."
Fitch said it made the cut in the course of routine
surveillance of the issuer.
The state's current budget year has a "sizeable imbalance,"
Fitch said, as lower than expected revenues are exacerbated by
growing Medicaid costs.
In a mid-year budget adjustment, officials proposed several
one-tine measures to close shortfalls. The state is also drawing
up a new biennial budget, which Fitch analysts think will be
balanced by relying mostly on recurring expense or revenue
adjustments for fiscal years 2014 and 2015.
The state's economy will likely continue growing slowly,
which could limit revenue improvements, Fitch said. The state is
also facing "an increasingly contentious decision-making
environment," according to Fitch.