Credit where credit's due
After tax hike, Moody's improves Oklahoma's rating
Oklahoma is getting credit.
Last year, Moody's Investor Services lowered the state's rating outlook to negative. Other bond rating services also downgraded Oklahoma's credit, citing the state's repeated budget failures and the inability of lawmakers to take necessary fiscal steps.
But last week, Moody's revised that rating back to stable. Wall Street's best minds think the state is a better risk.
We agree with Gov. Mary Fallin that the Moody's report is terrific news for Oklahoma. Fallin credited the state's growing economy, low debt burden and unemployment and the tax increase she signed into law earlier this year to fund a teacher pay increases.
The growing state economy has allowed a $370 million deposit in the constitutional Rainy Day Fund in recent months. When Fallin was sworn into office, the fund had $2.03.
Those who repeat the flawed theory that state government should be run like a business should take note. The business world says the way to run this state's business is to raise revenue and invest in the future.
The modest tax increases will fund a teacher pay raise averaging $6,100 a year, but do not solve the state's education funding problem. It doesn't address class sizes or the state's increasing reliance on uncertified teachers. The pay hike might help slow the state's loss of qualified teachers to other states, but state funding of public schools remains inadequate.
The Moody's report says the state's economy continues to rely on the oil and gas sector, an extraction industry with market-driven booms and busts. The road to a more diversified economy starts with a better educated public — people with math and language skills that allow them to innovate and prosper regardless of petroleum prices.
The Moody's report is simultaneously good news for the state, well deserved credit for hard work at the state Capitol and a reminder that the job is not done. The next critical turning point in that road is set for Nov. 6.