NEW YORK (CNNMoney) - Fitch Ratings has lowered the wake of the government's closure of Minnesota due to budget dispute.
Fitch hit the triple a rating status pedestal because of "difficulty of reaching consensus" in its budget deficit for the fiscal year that began July 1. Fitch also cited "the most controversial environmental accounting of the state in recent years."
A rating of debt reduction Minnesota harm because the increased risk means you need to pay interest rates to investors.
State levels of government, but not the entire key stop on July 1, after Governor Mark Dayton, Democrat and Republican legislators do not make peace in the dispute and meets the budget of $ 1.4 billion gap. Are struggling to raise taxes or cut spending.
This has resulted in state parks to close the entire weekend, Independence Day and caused layoffs of more than 20,000 state employees. Road construction projects are waiting and rest areas are motorways.
The rating agency also noted dependence of Minnesota budget spots than once during the recession and the likelihood that the budget agreement contains a number of them.
Fitch said the most important of these measures have been deferred payment to school districts and the use of funds from the stimulus package the federal government. The difference of $ 1.4 million budget represents the "return for payments of school to help balance the last biennial budget," said Fitch.
Minnesota residents affected by the off-state
The ARC now has a double A + rating to the debt of Minnesota.
On the positive side, Fitch praised Minnesota for its balanced economy of the labor market "recovery". The Office also noted that the State has a lot of debt ", where the debt burden, which is at the bottom of a medium range of about 2.7% of personal income." According to the data.
