Standard & Poors, the national bond rating service that last August placed Utah on its "Credit Watch" list because of the three tax initiatives on the general election ballot, has removed the state from the list following the initiatives' defeat.
The Credit Watch listing had what S&P termed "negative implications" for Utah's credit rating. They were that, if the initiatives has passed, the state's rating may have been lowered, making future bonding more expensive for taxpayers.Standard & Poors said Utah's AAA general obligation bond rating and various local issuer ratings are "affirmed" now that the People's Tax Reduction Initiative and the People's Tax and Spending Limitation Amendments will not become law. They would have cut government revenues by an estimated $325 million.
The state has $313.6 million of general obligation debt outstanding.
S&P said that although Gov. Norm Bangerter has proposed tax and spending limitations, "these are expected to be less restrictive and have less of an impact on credit quality."
Moody's Investors Service, the other national bond rating service, followed S&P in September, saying that passage of the initiatives would have "negative credit consequences" for those who bought bonds issued by the state and its municipalities.
Moody's did not place Utah on a "watch list" such as Standard & Poors but said passage of the initiatives would "result in Moody's review of municipal ratings" throughout the state.
That won't happen now.