The report’s name says it all: “For U.S. State Budgets, Austerity is Here to Stay.”
“Despite a steady pace of economic recovery for most states through the first two quarters of fiscal 2012, we believe that economic prospects and federal fiscal consolidation present significant uncertainty that could translate into continued budget austerity,” the report states.
During the past several years, most state governments have made difficult spending and revenue adjustments, which has helped the sector achieve relative credit stability. However, fiscal conditions remain strained and budget reserves are “significantly depleted,” which limits budget flexibility, according to S&P.
“The ability and willingness to adjust to economic volatility, revenue contraction and potential funding or policy changes at the federal level will determine credit direction heading into fiscal 2013,” the report states.
The report also includes information on each state’s budget situation.
Browse articles on Standard & Poor's Rating Services on Progressive Railroading
- BNSF expects shales, domestic intermodal and other promising sectors to propel 2012 traffic beyond GDP-growth levels
- Class I diversity strategies help women break through the glass ceiling
- The railroad renaissance through the prism of gradual growth, short-line tax credit caught in 'extenders' undertow, and on the gender diversity beat — by Pat Foran (Context, January 2012)
- As diesel costs rise, railroads turn to technology, training and procurement strategies to reduce fuel consumption
- Railroad safety: At grade crossings, the collaboration continues
- Maintenance of way: Material handling and distribution equipment update
- Rail industry data and trends from Progressive Railroading January 2012
- Town hall, Twitter style: TriMet turns to social media to obtain public input on budget issues
- UP's 4Q earnings conference: Higher capital spending, more traffic growth in 2012 also on the agenda
- New APTA report is a lesson in anti-HSR rhetoric