(AP) — Standard & Poor's has dropped West Virginia's bond rating amid the coal industry's downturn.
The agency announced the drop Thursday from AA to AA-minus, calling the rating's outlook stable.
Standard & Poor's credit analyst Nora Wittstruck said the downgrade stems from weakness in the energy sector, and particularly, coal. The agency views the challenge as long-term, not cyclical.
Standard & Poor's praised West Virginia's Rainy Day Fund and demonstrated willingness and ability to tackle large-scale financial challenges, including unfunded pension liabilities.
Amid falling coal and natural gas revenues, West Virginia still hasn't passed a budget for the fiscal year beginning July 1. The Republican-led Legislature and Democratic Gov. Earl Ray Tomblin are negotiating tax hikes, cuts and use of reserves.
Tomblin called the rating downgrade disappointing, but not entirely unexpected.