Moody’s lowers state outlook to negative
Another national rating agency is taking a dim view of Minnesota's financial picture.
Moody's Investors Service announced today that it has lowered the outlook for the state from "stable" to "negative." However, Minnesota's credit ratings remained the same. In a news release, Moody's said the outlook revision reflects "political intractability" and the "reliance on one-time measures" to balance the state budget.
Minnesota Management & Budget Commissioner Jim Schowalter confirmed the revision in a separate news release.
"This is a reminder that having a strong, balanced economy is not enough to keep high credit ratings. Sooner or later, we need to fix the state's budget so that it does not rely on one-time solutions," Schowalter wrote. "That continuing problem is particularly unfortunate because it obscures Minnesota's many strengths, including its general economy, strong forecasting process, and conservative debt management practices. But until a structural budget balance is achieved, we cannot assume that Minnesota's financial condition is well above average."
MMB noted that Minnesota still has its AAA rating from Standards and Poors. A third agency, Fitch, downgraded Minnesota from AAA to AA+ in early July.
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