The 'AA' rating on Massachusetts' GO bonds reflects: A demonstrated track record of managing through the recent recession without the overuse of onetime revenues; Reserve levels that have been rebuilt--beginning in fiscal 2004, carrying through fiscal 2005, and projected for fiscal 2006--reversing a trend of declines in fiscals 2002 and 2003 caused by the economic slowdown; Greater budget certainty following the spin-off of the Massachusetts Bay Transportation Authority (MBTA) and the School Building Authority (SBA), two former large budget commitments that, if not addressed, would have created significant budgetary pressures in future years; and A deep and diverse economy. The commonwealth's high debt burden and large unfunded pension liability constrain the rating. Massachusetts' full faith and credit pledge secures the...
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