ORLANDO-Standard & Poor’s Corp. is giving the state’s school construction program some needed assurances by assigning a double-A rating to Florida’s $256.97 million state board of education public education capital outlay bonds issue. The 2001 series C bonds are due June 1, 2031.

“The bonds could sell as early as this week,” S&P’s New York analysts Robin Prunty and Hyman C. Grossman write in their Oct. 23 overview of the rating. “The outlook is stable.”

S&P also gave a AA rating to the state’s outstanding full faith and credit debt. The rankings come as the legislature opens its 60-day session in Tallahassee with the Senate and House desperately trying to trim $1 billion from the state’s $48 billion budget.

The public education capital outlay program is the state’s largest bond program with $7.4 billion of total debt outstanding. Bond proceeds will fund school facility construction projects and refund outstanding series 1986-B bonds, which are first-lien obligations.

The New York bond rating company bases Florida’s double-A-plus GO ranking on several factors.

They are “a service-based economy that has performed well, recording strong and consistent growth in population, employment and income; solid economic growth prospects with a strong competitive position in the Southeast; average income levels; a strong financial position that affords significant flexibility to deal with recently identified revenue shortfalls; and a growing debt burden that has been planned and managed centrally through the state’s division of bond finance.”

But S&P also had some concerns.

“The state’s economy has been negatively affected by recent national economic weakness, and the forecast on state revenues is substantial,” the company’s overview states. “Declining consumer confidence and reduced travel and tourism inordinately affect Florida due to the state’s reliance on sales tax to fund 70% of its operations.”

But S&P notes Florida’s “high level of financial reserve and strong track record of budget control will be offsetting credit considerations in the near term.” The rating firm says “the fact that this is not the state’s peak tourism season mitigates some of the effect.”

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