NEW YORK - Standard & Poor's Ratings Services assigned its 'AAA' rating, and stable outlook, to the Texas Transportation Commission's approximately $750 million general obligation (GO) mobility fund refunding bonds, series 2015-A and $250 million mobility fund refunding bonds, series 2015-B (Private Placement). Standard & Poor's also affirmed its 'AAA' ratings on the commission's existing GO bonds and its 'AA+' ratings on obligations supported by pass-through and toll-equity loan agreements between the Texas Department of Transportation and various transportation authorities in the state. We view these pass-through agreements as an appropriation obligation of the Texas Department of Transportation. The outlook on the ratings is stable. The series 2015-A and 2015-B bonds are also secured by revenues in the state's mobility fund--which include driver record information fees, and a portion of motor vehicle inspection fees, driver's license fees, certificate of title fees, and other miscellaneous and investment income. "The 'AAA' GO rating reflects our view the state's strong revenue forecasting and cash management practices, including comprehensive monthly revenue and expenditure cash monitoring and forecasts, as well as a willingness to maintain strong liquidity to meet its constitutionally defined priorities, including the repayment of debt service," said Standard & Poor's credit analyst Eden Perry. The rating also reflects what we consider Texas':  • Strong economic performance although there may be some long term pressures due to the volatility of the oil and energy sector and potential declines in the export sector;  • Low overall net debt;  • Growing level of unfunded pension liabilities, which has been largely the result of contributions below the actuarially determined annual required contribution. Should this trend continue, it could result in downward pressure on the rating; and  • Potential long-term budgetary pressures, primarily related to the growing proportion of public school expenses that Texas is required to fund and its currently insufficient new sources of recurring dedicated tax revenue to support the increased education funding.  The stable outlook reflects Standard & Poor's expectation that Texas' economic performance will continue to support the revenue forecasts. The outlook also reflects our expectation that the state leadership will continue to adhere to the budget and cash management discipline that has enabled the state to maintain a strong level of reserves through periods of economic decline. Although we anticipate that public school funding and healthcare expenditures will continue to pressure the state's budget, we believe that officials will address these issues with an eye toward maintaining long-term budgetary stability. Although we don't anticipate a negative rating action in the next two years, the rating could be pressured if a decline in the energy sector results in significant revenue declines or economic weakness, if state officials fail to adopt timely corrective actions to address potential future budget gaps, or if the level of unfunded pension liabilities rises as a result of contributions falling below the actuarially determined annual required contribution.