Fitch downgrades Minnesota's credit

MN shut down capital08.jpg
Minnesota's excellent credit rating got knocked off its feet yesterday by Fitch Ratings, thanks to the government shut down. We've gone from a triple-A rating to double-A plus.

The upshot is that the state will have to pay higher interest rates when it borrows money.

But before everyone starts heaving rotten tomatoes at the GOP-controlled legislature and the governor, consider this: Fitch also blames the downgrade on structural budget problems that have been in place for years.

As in, when Tim Pawlenty was governor.

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Pawlenty kicked the state's budget problems down the road while daydreaming about the presidency.
Wall Street Journal:

Fitch, in downgrading Minnesota's rating Thursday, noted the state's "reliance on non-recurring gap-closing measures over the course of the recession."

Reuters:

The credit agency faulted Minnesota's use of so-called "one-shots", or nonrecurring revenues, to close deficits during the recession.

Fitch specifically singled out "school aid payment shifts employed to balance the last biennial budget" as the source for our current $1.4 billion in red ink -- one of Pawlenty's signature balance sheet tricks.

Not that any of this bothers Pawlenty. He's bragging to Republican voters about his fiscal record, and implying that he never raised taxes during his tenure. That's nonsense, of course. He negotiated an end to the last government shutdown partly by raising taxes on cigarettes -- and calling the tax a user fee.

Previously:

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Kirk the Conservative Jerk
Kirk the Conservative Jerk

Wait one moment. So the budget was Tim Fault while he was Governor, and the legislation was controlled by the democrats.  But now, it's the Republican controlled legislation fault, and not the Democrat Governor Mark Dayton?

Hmmm....

Michelle Bachmann
Michelle Bachmann

Have you ever heard the word unallotment before?   It was a pretty big story a few years ago.  It was mostly about Pawlenty ignoring the Democratic legislature and doing whatever the fuck he wanted.   It's kind of the reason our economy is so screwed up.  One of the many idiotic Republican ideas we have been victims of.       I can see why you like Bachmann so much, pretty much everything you say is either mean, stupid, or untrue just like her.  

Michael Hicks
Michael Hicks

I appreciate the reminder that money-shifting gimmicks are one of the reasons we're in this mess, and I'm glad that the independent panel looking into the budget problem had recommended against using them again.  The state should have banked up a reasonable amount of money in good times, to have a little something stowed away when times went bad.  I was disappointed back when Ventura decided to do a rebate program which partly blew up that idea, and Pawlenty's veto-mania in the last decade just continued to make things worse.

Kirk the Conservative Jerk
Kirk the Conservative Jerk

We had a 2+ Billion dollar surplus in 2006.At that time, the Democrat controlled legislation was kicking around the idea of pulling another Jesse.  They were contemplating giving back the money to Minnesotans in the form of a rebate check.   Unfortunately they did not, and went on a spending binge.Four years later we're 5+Billion in the hole.Why should it always be the role of government to grow itself, or at least sustain itself, while the public which feeds the beast, has been retracting?

Mn Voter
Mn Voter

Pawlenty raised cigarette tax and said anyone calling it different than a "Fee" is wrong. Maybe he is realizing that no new taxes is "NO NEW TAXES". I hope the current legislature hears that loud and clear. It is the spending that needs to come down.

Kirk the Conservative Jerk
Kirk the Conservative Jerk

I would be happy with spending holding flat for a few years.The daunting reality is proving that, government's insufferable desire to feed upon the public, will always demand an increase from that public.And when the increase is not as big as they had hoped, they lie and call it a "cut".

Mn Voter
Mn Voter

Since Dayton wants to play hardball, lets play hardball. A real 20% reduction of every department. All state employees salary capped at $75,000 and a 401K introduced for new employees (no defined retirement going forward) and the current state employees will need to retire at 62 before drawing pension. In addition, all state employees will need to pay 25% of their health insurance. Lets take the budget from $34,000,000,000 to $27,200,000,000. I'm sure our taxes can support that.  

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