Utah maintains top credit rating amid US government slip

SALT LAKE CITY (ABC4) — Just weeks after Moody’s downgraded the U.S. Government’s top credit rating, the credit ratings provider reaffirmed Utah’s Aaa issuer rating.

Utah is just one of 14 states that hold an Aaa rating, which is the highest rating possible through Moody’s scale. According to Moody’s, the rating means the Beehive State’s credit risk has been judged to be minimal and of the highest quality.

“The state is well-positioned to maintain that strong credit position going forward,” Moody’s said in its report. “Demographic trends will continue to drive good revenue performance and the state’s economy continues to diversify. Utah’s low leverage from bonded debt, pension liabilities and retiree healthcare results in very low fixed costs that provide the state excellent budget flexibility.”

Utah Gov. Spencer Cox said in a press release that the high credit rating reflects the state’s strong economy, fiscal management and minimal debt.

“These ratings reflect the fact that our hard work is paying off,” said Cox. “Utah continues to be recognized as one of the best-managed states in the nation because of our commitment to fiscal responsibility and the incredible work of public servants who take that responsibility seriously every day.”

According to the State, the high credit will allow Utah to continue to receive low borrowing costs, which in turn will save taxpayer dollars by reducing the amount Utah must pay in interest on bonds to fund infrastructure and public services.

While the report praises Utah’s fiscal responsibility, it said the state is not without its challenges. Specifically, Moody’s said the state’s cost of living has increased rapidly and housing affordability continues to be an issue that could slow in-migration trends.

“We don’t take this kind of recognition for granted,” Gov. Cox added. “The recent launch of GRIT and the BUILD Coordination Council reflects our commitment to keep improving by solving problems early and delivering real results for Utahns. A top credit rating is something to be proud of, but it is also a reminder to keep earning that trust every single day.”

In May, Moody’s released ratings for the United States as a whole, dropping the nation’s credit rating from the gold-standard Aaa to the second-highest rating of Aa1. The credit rating provider cited continuous fiscal deficits with increased federal spending, while tax cuts have reduced government revenues.

“We expect federal deficits to widen, reaching nearly 9% of GDP by 2035, up from 6.4% in 2024, driven mainly by increased interest payments on debt, rising entitlement spending and relatively low revenue generation,” Moody’s said.