Blog — 23 Apr, 2022
Top 10 States with the Highest School District Credit Quality
By Robert Durante and Yashi Yadav
S&P Global Market Intelligence has identified the ten states with the strongest average local school district credit scores. Leveraging S&P Global Market Intelligence’s Public Finance Automated Scoring Tool (PFAST), we generated credit scores for more than 9,000 school districts nationwide. When the average school district credit scores were aggregated by state, these 10 states generated the highest credit scores, or overall credit quality:[1]
- New York
- New Jersey
- Minnesota
- Oregon
- California
- Wisconsin
- Missouri
- Ohio
- Michigan
- Iowa
What do these states have in common? Breaking Down the Results
Economic Prosperity
School districts in these states have been able to successfully manage the COVID-19 pandemic and have low financial risk. Low financial risk includes maintaining reserves, positive operating results, manageable debt levels, and high liquidity. Also, states these school districts are in generally have stronger economies helping support their overall credit quality.
Modest Environmental Risk
Interestingly, the school districts in these states generally have limited physical risk or risks from natural hazards. The exception is California where wildfires have exposed these districts to heightened environmental risk.
Our Approach
S&P Global Market Intelligence collects financial, economic, and environmental data for nearly every local government including school districts. With PFAST, you can spread and generate credit scores, not only for districts but for every city, county, special purpose district and water & sewer utility in the United States.[2] As a result, we have unprecedented insights into state-by-state credit quality, patterns, and medians.
[1] The school districts included are restricted to the ones with outstanding debt. Source: Public Finance Automated Scoring Tool. Data as of April 2022. For illustrative purposes only.
[2] S&P Global Ratings does not contribute to or participate in the creation of credit scores generated by S&P Global Market Intelligence. Lowercase nomenclature is used to differentiate S&P Global Market Intelligence PD credit model scores from the credit ratings issued by S&P Global Ratings.
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