Washington State’s Debt Rating Outlook: “negative”

Washington State's debt rating outlook has been downgraded to "negative" by both Moody's and Fitch rating agencies. From the Seattle Times article:

Moody's Investors Service said in its rationale released Monday that the state faces challenges in fixing structural budget problems, noting that Washington faces a revenue shortfall at a time when other states are reporting no budget problems or only minor gaps.

"The outlook revision to negative from stable reflects the magnitude of the revenue falloff that continues to challenge the state as it struggles to recover from the recession," Moody's statement said.

… Moody's noted that the state's reliance on a sales tax has made it challenging during a recession that has impacted consumer confidence. The agency cited other challenges, including reliance on the cyclical aerospace industry, above-average debt ratios and frequent voter initiatives that add to budget challenges.

Washington lawmakers are working to close a roughly $1 billion budget deficit and want to leave several hundred million dollars as a buffer.