As the House begins debating ways to increase revenue to fix our roads and whether our workers deserve an income tax reduction to offset those tax increases, a point will be made by those who oppose tax cuts that any meaningful reduction in our individual income tax rates will put our state’s credit rating at risk. Their point implies a recklessness on the part of those House members who advocate tax relief for South Carolina workers. This implication deserves further scrutiny.
South Carolina receives credit ratings from three organizations: Standard & Poor’s (S&P), Fitch, and Moody’s. Fitch and Moody’s has long rated our credit worthiness at AAA and Aaa, respectively. Our relationship with S&P has been more volatile. Historically, we enjoyed a AAA rating with them. After Hugo hit in 1989 they lowered our rating to AA+. We returned to AAA status in 1996. In 2005, they again lowered our rating to AA+ where it has remained.
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