Minnesota had the outlook on its debt revised to negative from stable by Moody’s Investors Service, which cited “political intractability” resulting in one-time budget moves to end a 20-day government shutdown last month.
Moody’s affirmed its Aa1 rating on the state’s general- obligation debt, the second-highest, and its Aa2 grade on state- supported debt, the company said today in a statement. The outlook covers $6.1 billion of debt, Moody’s said.
Democrat Mark Dayton, a first-term governor, and the Republican-controlled Legislature closed a $5 billion budget deficit and ended the state government shutdown July 20 by selling bonds tied to a 1998 tobacco settlement and shifting additional education spending into the next budget. There’s a likelihood of future budget gaps as a result, Moody’s said.
“These negative factors put the state in a weaker position relative to other states within the same rating category,” Moody’s said.
“Sooner or later, we need to fix the state’s budget so that it does not rely on one-time solutions,” said Jim Schowalter, the state’s Management & Budget commissioner, in a statement.
Fitch Ratings downgraded about $5.7 billion in Minnesota general-obligation bonds to AA+ from AAA on July 7 in part because of the state’s reliance on one-time funding sources.
To contact the reporter on this story: Mark Niquette in Columbus, Ohio, atmniquette@bloomberg.net
No comments:
Post a Comment