The three financial rating agencies have given North Carolina a AAA rating in the wake of a budget crisis.

The rating is the highest possible and the three rating agencies, Moody's, Standard & Poor's and Fitch Ratings affirmed the top score, which like an individual credit score is a measure of credit-worthiness and financial security. North Carolina is one of only seven states to have the top score.

"The Governor and the General Assembly have been effective in managing serious financial and budgetary pressure during this tough climate,” said state Treasurer Janet Cowell, who announced the ratings Tuesday afternoon. "It is a vote of confidence for the state that we have been able to maintain this rating through the first year of the economic crisis."

In the political world the possibility of having a rating lowered is often tossed out as a dire warning against, for example, furloughing state workers.

For Democrats, who control state government, the AAA rating could serve as evidence that a decision to cut spending and raise taxes was the best way to cope with a budget crisis and deep recession. Of course, the words "AAA bond rating" probably don't have the same power as "raised your taxes," which is what Republicans, who are aiming to control the legislature, will be pointing out frequently.

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The National Republican Senatorial Committee has a new ad attacking Democratic candidate Kay Hagan's record as a state senator.

What it says: The ad shows images of Kay Hagan with graphics similar to the Olympics. Narrator: "What if they gave gold medals for financial irresponsibility?" Announcer: "The gold medal goes to Kay Hagan." Narrator: "Budget writer Kay Hagan helped double state debt. The gold for government waste?" Sports announcer: "Kay Hagan." Narrator: "Hagan's budgets pushed North Carolina to the highest taxes in the Southeast. And the gold for twisting the truth?" Sports announcer: "Kay Hagan." Narrator: "The press said Hagan’s TV ad was 'overstated, inaccurate.'" Sports announcer: "Kay Hagan." Narrator: "The National Republican Senatorial Committee is responsible for the content of this ad." The ad says "Highest Taxes in Southeast 2006."

The background: The ad raises three issues: high taxes, state debt and a previous Hagan ad.

TAXES: Every year, the Tax Foundation, a Washington-based think tank, analyzes the combined state and local tax burden in all 50 states.

According to its overall ranking, North Carolina had the 17th highest burden in 2006.

The think tank does not break out the rankings by region, but the John Locke Foundation, a conservative think tank in Raleigh, has compared those numbers to other states in the region.

The Locke Foundation defines the Southeast as Florida, Georgia, North Carolina, South Carolina, Tennessee and Virginia.

The U.S. Bureau of Economic Analysis, the only federal agency to define the Southeast, includes those states as well as Alabama, Arkansas, Kentucky, Louisiana, Mississippi and West Virginia.

If those states were included, North Carolina would have been second highest in 2006, after Arkansas.

DEBT: The state constitution requires the legislature to balance the budget, so North Carolina's debt does not come from annual budget deficits.

Instead, the debt comes from bonds issued by the state to pave highways, build jails and college buildings and pay for other projects. The bonds are backed by the state's expected tax revenue.

From 2002 to 2007, Hagan was a co-chairwoman of the Senate Appropriations committee.

During those five years, the state's overall debt went from $3.5 billion to $6.9 billion — nearly doubling.

However, the increased debt has not hurt North Carolina's credit rating. The three agencies that rate government bonds — Moody's, Fitch and Standard & Poor's — each give it a top-tier ranking.

North Carolina is one of only seven states to have top rankings from all three.

HAGAN'S ADS: In an ad run in August, Hagan's campaign claimed that she "reach(ed) across party lines to ban driver's licenses for illegal immigrants."

A previous Claims Department by the N&O found that claim overstated the supporting role she played in that bill and the Senate Democrats' previous opposition to stronger proposals from Republicans.

The ad's "account of Hagan's role on the driver's license bill is overstated and inaccurate," the article noted.

Is it accurate? Yes and no. The claims about state debt and Hagan's previous ad are true. But the definition of the Southeast used by the John Locke Foundation is bizarre. Though the ad correctly cites the foundation's research, the claim is misleading.

— Ryan Teague Beckwith

Democratic gubernatorial candidate Richard Moore's latest ad boasts about his work on the state's pension fund and on the minimum wage, Ben Niolet reports.

What the ad says: "Eight hundred thousand workers and seniors know the truth about Democrat Richard Moore. He built the nation's second strongest retirement fund. A bulldog pushing for corporate accountability. Moore's protected consumers and increased North Carolina retirement funds by billions. And he'll do the same as governor. Cut property taxes for seniors. Tuition-free community college, and raise the minimum wage again. Richard Moore. A Democrat who will always stand up for you."

The background: As state treasurer, Moore oversees the state's pension fund, which holds retirement money for about 820,000 employees of state and local government. Under Moore, the pension fund was ranked second by Standard & Poor's among public pension funds on its ability to pay its obligations.

A September 2003 story in The News & Observer ran under a headline that described Moore as a 'bulldog.' The story focused on how Moore, then in his first term as treasurer, had gained national notoriety for pushing for investment firms to disclose conflicts of interest. He has also called for better corporate governance.

Moore's office estimates that money management decisions made under his tenure have generated $6.9 billion for the pension fund.

Moore has plans to cut property taxes for seniors and offer free community college tuition for high school graduates who go directly into community college. He supports raising the minimum wage. The ad's text could be interpreted to mean that Moore had previously raised the minimum wage. In 2006, he pushed business leaders and others to support a $1 an hour increase. But ultimately, it was the legislature that approved an increase.

Is the ad accurate? Yes, although the ad could leave viewers with the impression that Moore personally raised the minimum wage. He supported the increase, but it was the legislature that raised the minimum wage.