Fitch Rates Rhode Island's $98MM GOs 'AA'.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch assigns an 'AA' rating to the State of Rhode Island Rhode Island, island, United States Rhode Island, island, 15 mi (24 km) long and 5 mi (8 km) wide, S R.I., at the entrance to Narragansett Bay. It is the largest island in the state, with steep cliffs and excellent beaches. and Providence Plantations' $98,105,000 general obligation (GO) bonds, consolidated capital development loan of 2006, series C. The bonds are scheduled to sell competitively on Oct. 24. Fitch also affirms the underlying 'AA' rating on the state's $863 million outstanding GO bonds. The Rating Outlook is Stable. Rhode Island's 'AA' GO bond rating reflects the state's history of responsible action to protect its debt and financial position. The state's economy has grown and diversified away from manufacturing, making it less vulnerable to economic cyclicality, although growth has lagged in the recovery. Reserves continue to be fully funded at the statutory maximum of 3% of revenues. Debt levels are above average but still in the moderate range. Rhode Island has added jobs in every year since 1992 and outperformed both the U.S. and neighboring states in the most recent recession. Growth has lagged in the recovery, with 2005 employment growth of 0.6% compared to the U.S. increase of 1.5%, and the rate of growth has been declining in 2006. August 2006 non-farm employment was only 0.3% above the August 2005 level, compared to 1.3% for the U.S., with robust growth in financial activities and construction offset by continued declines in manufacturing. Downwardly revised personal income per capita [Latin, By the heads or polls.] A term used in the Descent and Distribution of the estate of one who dies without a will. It means to share and share alike according to the number of individuals. figures for 2005 show Rhode Island at 102% of the U.S., ranking 17th of the states on this basis. Rhode Island's fiscal 2006 budget eliminated a projected $164 million deficit through a combination of revenue enhancements, opening surplus, and expenditure reductions. Revenue results were below forecasts for much of the year, but after revisions in November and May, the state expects to have ended fiscal 2006 in line with estimates of $3.1 billion in general revenue, 4.3% above fiscal 2005, and a free surplus of $23.7 million, after reserve funding. The fiscal 2007 budget addressed an estimated $222 million shortfall. The budget reduces state employment through attrition and includes numerous reforms to entitlement programs. Education aid increases 4.8%. The budget does not include any broad-based tax increases or cuts. During the 2006 session, the legislature provided for an alternative income tax flat-tax option for individuals that is expected to reduce revenues by $7.2 million in fiscal 2007, rising to $24.1 million at full phase-in in fiscal 2011. This was designed to enhance competitiveness with surrounding states. The state legislature A state legislature may refer to a legislative branch or body of a political subdivision in a federal system. The following legislatures exist in the following political subdivisions: Rhode Island's debt burden equals 5.5% of personal income. This is meaningfully reduced from the historical peak of 8.5% in 1994, but has risen, primarily due to GARVEE GARVEE Grant Anticipated Revenue Vehicle (debt financing instruments for state highways) issuance for transportation projects. The funding level of the state employee pension system has dropped to less than 60%; the state passed significant pension reform in the 2005 session. The series C bonds will be due Nov. 15, 2007-2025, callable Callable Applies mainly to convertible securities. Redeemable by the issuer before the scheduled maturity under specific conditions and at a stated price, which usually begins at a premium to par and declines annually. starting Nov. 15, 2016. For more information on the State of Rhode Island and Providence Plantations Providence Plantations was the first permanent settlement in Rhode Island. It was established at Providence in 1636 by English clergyman Roger Williams and a small band of followers who had left the repressive atmosphere of the Massachusetts Bay Colony to seek freedom of worship. , see Fitch Research dated Sept. 20, 2006, available on the Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. web site at www.fitchratings.com. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. 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