Paul Rosenthal: Minnesota's credit rating has improved

Dear neighbors,

Moody’s Investors Service has revised Minnesota’s outlook on general obligation bonds from negative to stable.  This is big news for our state, as previous fiscal mismanagement led to a downgrade in our rating to negative. 

This session, we worked to put Minnesota back on the path towards fiscal responsibility and economic prosperity, and Moody’s rating is proof of that.

In fact, Moody’s released a statement saying the following:

“Minnesota's rating outlook has been revised to stable reflecting the state's strong financial management that has resulted in improved revenue performance, replenishment of budget reserves, and budget balancing solutions that are largely recurring. Moody's expects that the state will continue to exhibit sound financial practices that will lead to further improvement in the state's overall balance sheet.”

Minnesota will sell these bonds on August 6, and the proceeds will fund various capital improvement and transportation projects.

Moody’s also listed Minnesota’s credit strengths to include strong economic fundamentals—including diverse employment and high wealth, rebuilding of budget reserves, and satisfactory liquidity.

The challenges on Moody’s list include a negative fiscal 2012 fund balance; a history of gridlock; and a trend of political intractability resulting in late budgets and government shutdowns (2005 and 2011).

The 2013 legislature put these challenges behind us, finishing on time with a balanced budget that pays down our debts and invests in the priorities Minnesotans broadly share—education and job creation.

Moody’s gave Minnesota a stable outlook rating due to improved revenue and economic trends in the state, and budget balancing solutions that are largely recurring.  Furthermore, they expect that the state will continue to exhibit sound financial practices that will continue to lead to further improvement in our overall balance sheet.

Minnesota’s rating is expected to continue to improve if we can continue to reverse the trend of gridlock, sustain the trend of a structurally balanced budget, and maintain healthy budget reserves.  The rating could only go down if we reverse course and return to the status quo of reliance on one-time budget solutions, political gridlock, and ongoing budget deficits.

For more information, visit Moody’s website here:  http://bit.ly/1bJWMZW

As your representative, I will continue to support sound fiscal policy and investments in education and jobs that will keep our state economically competitive for years to come.

As always, please contact me anytime with your questions, concerns or comments on the state budget or any other matter.

Sincerely,

Paul Rosenthal