Florida and Texas have the nation’s greatest exposure to climate change, but both states got through the 2017 hurricane season with strong credit quality intact, Moody’s Investor Services reported.
Rising sea levels and increases in the frequency and intensity of storms threaten Florida and Texas more than the rest of the 50 states.
But Moody’s, a New York-based bond rating agency, also reported that “both states weathered hurricanes Irma and Harvey without an effect on their credit quality.”
Economic disruption, measured as lost output, accounted for 20 percent of the total damage caused by Hurricane Irma, compared to 10 percent of the total damage Hurricane Harvey caused, according to Moody’s.
Florida has the greatest economic exposure to flooding, coastal storm surges and wind damage. Almost 77 percent of Florida’s gross domestic product (GDP), or total economic output, is concentrated in coastal counties, compared to 31 percent in Texas.
But the state governments of both Florida and Texas have ample liquid reserves to offset temporary slowdowns in collections of tax revenue after hurricanes, the bond rating agency reported.
Florida and Texas have “growing and increasingly diverse economies that have usually bounced back quickly after storm events,” Moody’s reported. Among other sources of economic resiliency, Florida and Texas “dominate coverage by the National Flood Insurance Program.” The program, however, “requires periodic reauthorization and has been caught up in the federal budget debate.” – Mike Seemuth