Minnesota is back to perfect, at least in the eyes of one Wall Street credit rating agency.
Fitch Ratings elevated Minnesota’s status to AAA on Thursday, the top rating that typically brings better interest rates when the state borrows for construction projects. The rating had been AA+ since 2011, when lingering effects of the last recession and political gridlock caused a downgrade.
“Minnesota has shown significant financial resilience through downturns and a strong commitment to bolstering its financial position as conditions improve,” Fitch analysts wrote in the memo announcing the latest change.
There are two other rating firms watched by bond buyers; Minnesota has improved in their rankings, too, but is still a notch shy of sterling. The Fitch change comes as Minnesota finance officials prepare to sell nearly $800 million in bonds for projects previously authorized by the Legislature.
Gov. Mark Dayton, who is in Philadelphia for the Democratic National Convention, hailed the news in a written statement.
“This upgrade, to Fitch’s top credit rating, is a testament to the hardworking Minnesotans and businesses across our state who have led our economic recovery, and to the work our state has done over the past six years to right the fiscal ship,” Dayton said.
The Fitch raters did strike some notes of caution.
“Historically, budget negotiations have often been contentious at times of split government,” they wrote. “Following the November 2014 elections, and after two years of single-party control, control is once again divided between the two political parties.”
That said, the analysts pointed out the last time Dayton and the Legislature passed a budget “the process was significantly smoother than in some earlier years _ disagreements surrounding the budget for the fiscal 2012 -2013 biennium resulted in delayed budget adoption and a 21-day partial state government shutdown.”