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Moody’s cuts debt rating of Mountain State

CHARLESTON — The Justice administration says Moody’s Investors Service has downgraded the state’s general obligation debt rating, citing growing structural instability between the government’s financial resources and expense liability.

Revenue Secretary Dave Hardy says Moody’s downgrade from AA1 to AA2 follows similar moves last year by Fitch Ratings and Standard & Poor’s.

Gov. Jim Justice says state borrowing “just got more expensive” and criticized legislative proposals to refinance some of the state’s pension debt.

The Democrat has proposed fractional sales and corporate tax increases, establishing a surplus safety fund and a bond-funded highway reconstruction program to close a projected $500 million state deficit in the coming year and boost West Virginia’s economy.

Republican legislative leaders have criticized the tax proposals.

“This bond downgrade reinforces the need for fundamental changes to how we operate our state government.

“The failed tax-and-spend policies of the past will not solve this problem,” House of Delegates Speaker Tim Armstead, R-Kanawha, said.

“We need bold leadership to right-size our state government and restructure our tax code in a way that promotes growth. The proposal to increase spending by another $318 million and pay for it with the largest tax increase in the history of our state will not solve our budgetary challenge. In the coming weeks, we will work to construct a budget that will restore confidence in our future economic outlook.”

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