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08 June 2015

Fitch Ratings Gives Georgia High Marks for Conservative Financial Management & Diverse Economy

Fitch Ratings, one of the "Big Three" credit rating organizations recognized nationally by the U.S. Securities and Exchange Commission (SEC), released a report praising the State of Georgia for its conservative financial management and diverse economy.

"Georgia has a long history of conservative revenue estimation and balanced operations, and consistently takes timely action to address fiscal weakness," the report reads. "The state took repeated action during the recession to maintain fiscal balance through steep spending cuts, use of federal stimulus and draws from its rainy-day fund; the revenue shortfall reserve (RSR).

"Since then, it has maintained a conservative approach to fiscal management, curbing spending growth and making progress in rebuilding the RSR balance."

The Fitch report goes on to say that Georgia ended fiscal year 2014 with a solid RSR balance just over $1 billion, up from a low of $103.7 million in 2009. Fitch gives the state's spending restraint, conservative revenue estimates, and strong economic growth with rebuilding the RSR.

"After a sharp recessionary downturn, the state's diverse economy has accelerated with employment growth outpacing national trends," Fitch Ratings writes. "While the recession was more severe in the state than the nation overall, Georgia's economic recovery has outpaced that of the nation over the past few years.

"Statewide employment began showing year-over-year (YOY) gains in fall 2010, shortly after those of the nation. While the initial growth rate was tepid and volatile, the growth trend outpaced national YOY employment gains in 2013 (2.1% versus 1.7%), and Georgia's three-month moving average April 2015 YOY gain of 3.3% was ahead of the nation's 2.3% rate. Similarly personal income growth in Georgia has been strong, exceeding the national rate in 2013 and 2014."