The 'AA+' long-term rating on Michigan's GO debt reflects: A deep economic base that continues to slowly diversify away from durables manufacturing, although persistent economic weakness suggests that the largest benefits of this trend may be yet to come; A low debt burden that has not been used to solve recent budget gaps, unlike many other states; and The largely funded position and manageable nature of the state's pension liabilities. The state's weakened financial position and its decision not to follow previous statutory provisions that would have ensured a minimal level of reserves limit these strengths. Michigan remains one of the few states yet to see an economic rebound and several risks stand in the way of future performance. The...
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