• Utah has achieved strong economic growth, particularly as it rebounds from the pandemic.
  • The State has an issuer rating of AAA (highest) by S&P Global Ratings, Moody’s Investor Service, and Fitch Ratings.
  • Utah maintains strict debt limits and fiscal prudence for funding required for capital projects.
  • Utah has received a number of high rankings and accolades related to economic performance.
  • The State of Utah has continued to experience impressive economic growth, particularly as it rebounds from the COVID-19 pandemic. Utah has recorded strong economic gains—exceeding those at a national level—based on several key indicators, including:

    • The real gross domestic product (“GDP”) growth rate for Utah was 4.2% per year in the fourth quarter of 2022 (up from 2.5% the previous quarter), according to the Bureau of Economic Analysis.
    • The State’s unemployment rate was reported at 2.23% in May 2023, according to the Bureau of Labor Statistics.
    • Utah’s population grew an annualized 1.8% over the past five years ended 2022, which ranks second among all 50 states by growth rate, according to IBISWorld.

    Salt Lake City, Utah’s capital and largest city, is among those areas of the State demonstrating significant economic growth. Economic activity in Salt Lake City is generally considered to be even greater than it was since before the pandemic. As cited in a recent report by the University of Toronto’s School of Cities, downtown activity in the capital city this spring was 139% of what it was during the same period in 2019. And strong economic recoveries have occurred across other areas of Utah as well.

    Strong Credit Ratings

    Utah has achieved an issuer rating of AAA by S&P Global Ratings, Moody’s Investor Service, and Fitch Ratings, making it one of only 14 states in the country assigned the highest rating by each of these major credit rating entities.

    Many of Utah’s largest counties and cities are highly-rated in terms of their underlying fiscal health. Below is an example of several of counties and cities in the State of Utah, along with their respective credit ratings, as assigned by S&P Global Ratings. Please note that this is for informational purposes. Credit ratings assigned by rating entities may differ and are subject to change.

    County Credit Rating City Credit Rating
    Box Elder AA Bountiful AA
    Carbon AAA Draper AAA
    Davis AA+ Lehi AA+
    Emery AA+ Millcreek AA+
    Salt Lake AA+ Murray AA+
    Sevier AA- Ogden AA-
    Summit AA+ Orem AA+
    Tooele AAA Provo AAA
    Uintah AAA Salt Lake City AAA
    Utah AAA Sandy AAA
    Wasatch AA+ South Jordan AA+
    Washington AA St. George AA
    Weber AA- West Valley City AA

    Source: S&P Global Ratings, as referenced in Gardner Business Review, November 2022

    Strict Debt Limits

    The State of Utah has historically demonstrated fiscal restraint and prudence as it pertains to debt and borrowing practices. As referenced in Gardner Business Review, a report produced by The Kem C. Gardner Policy Institute at the University of Utah – David Eccles School of Business, much of this can be attributed to Utah’s Constitution, which limits the State’s ability to borrow money. Under its terms, Utah’s general obligation debt is capped at 1.5% of the “fair market” value of all taxable property in the State. Limiting debt to a relatively small fraction of the value of taxable property allows this cap to adjust upward (or downward) based on potential increases/decreases in property values. Thus, if taxable property values in Utah increase, the State’s borrowing capacity would adjust accordingly and within the prescribed limit.

    As the report also noted, Utah’s State Legislature passed a more restrictive debt limit in 1989 than that of Utah’s Constitution, which restricts borrowing to 20% of the appropriation limit adopted by the Legislature within a given year. The appropriations limit uses 1985 as the base year and restricts spending increases to amounts reflecting the increases in population, personal income, and inflation. This debt limit can be exceeded only if “approved by more than a two-thirds vote of both houses of the Legislature.” It is worth noting that the statutory debt limit is generally considered a guideline that influences borrowing decisions, rather than a strict limit on debt.

    Whether constitutional or statutory, strict debt limits and prudent borrowing practices may be important considerations for state and local governments, issuers, and investors alike.

    High Rankings & Accolades

    The State of Utah has received a number of high rankings and accolades related to economic performance. Below is an example of recent achievements that speak to Utah’s continued success at both a state and local level, according the Governor’s Office of Economic Opportunity:

    Best State and Best Economy

    Utah ranked as the nation’s best economy and #1 overall

    – U.S. News & World Report, April 2023

    Best Economic Outlook

    Utah ranked #1 overall for the 16th year in a row

    – Rich States Poor States, April 2023

    Best Performing Cities

    Provo-Orem, Utah was named the best performing large city in the U.S. for the third consecutive year

    Two of the nation’s best-performing small cities are in Utah

    • Logan (#2)
    • George (#3)

    – Milken Institute, May 2023

    Best State to Start a Business

    Utah was recognized as the best state to start a business

    – WalletHub, January 2023

    Four of the top five best small cities for starting a business are in Utah

    – WalletHub, April 2023

    This is all very encouraging and reflective of the economic growth experienced in Utah. We will continue to monitor these and other local developments. Having portfolio management teams located in the states where they invest enables Aquila Group of Funds to gain on-the-ground insights that may impact our mutual funds and shareholders.


    This information is general in nature and is not intended to provide investment, accounting, tax or legal advice. It is not intended to represent a recommendation or solicitation related to any particular investment, security or industry sector.

    Independent rating services (such as S&P Global Ratings, Moody’s Investor Service, and Fitch Ratings) assign ratings, which generally range from AAA (highest) to D (lowest), to indicate the credit worthiness of the underlying bonds in the portfolio. Where the independent rating services differ in the rating they assign to an issue, or do not provide a rating for an issue, the highest available rating is used in calculating the Fund’s allocations by rating.

    Mutual fund investing involves risk; loss of principal is possible. Investments in bonds may decline in value due to rising interest rates, a real or perceived decline in credit quality of the issuer, borrower, counterparty, or collateral, adverse tax or legislative changes, court decisions, market or economic conditions. State-specific fund performance could be more volatile than that of funds with greater geographic diversification.

    Before investing in any mutual fund offered by Aquila Group of Funds, carefully read about and consider the investment objectives, risks, charges, expenses, and other information found in the Fund’s prospectus. The prospectus is available from your financial professional, by clicking here, or by calling 800-437-1020.