FRANKFORT, Ky. (AP) — Gov. Andy Beshear on Wednesday pointed to another sign that Kentucky's economy is recovering from the pandemic — a credit rating agency's upgraded assessment of the state's financial outlook.
In revising the state's rating to stable, Fitch Ratings said this week the change reflects Kentucky's “solid economic recovery to date from the pandemic trough.” The rating agency noted the state's “solid ability to control revenues and expenditures to maintain fiscal balance” and its “declining reliance on one-time measures.” Fitch had previously rated the state's outlook as negative.
“This improvement further indicates Kentucky is poised to sprint out of this pandemic and be a leader in the post-COVID economy,” Beshear said in a news release.
It's a dramatic turnaround from a year ago, when coronavirus-related shutdowns had the state bracing for a prolonged economic downturn. Multiple infusions of federal aid helped prop up the economy, and the state's revenue collections ended up being more resilient than expected.
Beshear, a Democrat, on Wednesday pointed to his administration's “responsible fiscal management” in guiding the state through the pandemic.
Kentucky House Speaker David Osborne said GOP lawmakers deserve credit for taking a “fiscally disciplined and responsible" approach in crafting the state budget and allocating federal pandemic relief funds. Republicans hold overwhelming majorities in both legislative chambers.
"Ultimately, the Fitch Ratings upgrade is proof that we are on the right path, but we must recognize that the economic uncertainty created by the pandemic and the state’s response to it is far from over,” the Republican speaker said in a statement.
Republicans say an even stronger economic rebound has been held back by the governor's ongoing virus-related restrictions. State Agriculture Commissioner Ryan Quarles called on the governor this week to set a full reopening date to “give our people certainty and the ability to plan for a responsible reopening.”
“The longer Kentucky refuses to open up, the longer we will lose jobs and workers to other states,” Quarles wrote in an op-ed piece.
Quarles is among several Kentucky Republicans considering a run for governor in 2023, when Beshear has said he will seek a second term.
Beshear has pointed to a number of steps he's taken to ease or lift virus restrictions, and said Wednesday that as more people get vaccinated it will “be safer” to remove more restrictions.
The ratings upgrade from Fitch was the latest sign of economic recovery in Kentucky.
Kentucky reported a 5% preliminary unemployment rate for March of this year, down slightly from the prior month and better than the national jobless rate of 6% in March.
Beshear's administration recently said the state is poised to end the current fiscal year with an approximately $586 million surplus in its General Fund, based on recent revenue estimates. The General Fund pays for most state services, including education, health care and public safety.
“What that will mean is that we will end up with over a billion dollars in our rainy day fund," the governor said Wednesday. "It is the most money ever in a rainy day fund in Kentucky by both dollars and percentage of the total budget.”
Meanwhile, a new influx of federal stimulus money will provide another boost to the state's economy, Beshear said.
The legislature approved spending federal pandemic relief money on such big-ticket items as broadband expansion, school construction and clean-water projects. The governor, who backed the spending, said the projects will create thousands of jobs. The money came from the pandemic aid package championed by President Joe Biden and passed by congressional Democrats — including Kentucky’s lone Democratic congressman, John Yarmuth.