Minnesota’s bond rating lowered

Life's a Fitch! (Photo: blogs.citypages.com)

Yesterday, Fitch Ratings lowered Minnesota’s bond rating from AAA to AA+. For those of you who don’t know (or have never cared about) state bond ratings, this is your wake-up call.  State bond ratings are a big deal and even small changes can cost taxpayers millions of dollars–they have a direct impact on the interest rate the state gets on loans (for things like capital improvement projects).  These loans, of course, have to be paid back by taxpayers; so a lower bond rating means that Minnesota taxpayers are going to be paying more interest (something that nobody likes).

It was all fun and games until someone got hurt. (Photo: blogs.citypages.com)

Fitch Ratings said that the downgraded rating for Minnesota was in part due to the government shutdown and in part due to the accounting gimmicks that Minnesota has been using for years now to balance its budget (example: deferring payments to schools).

It is time for Minnesota to get responsible with the budget.  Since Ventura and throughout the Pawlenty administration, Minnesota has been relying on budgetary tricks to make it look like the state was running a balanced budget (we actually weren’t) so we wouldn’t have to raise taxes.  Well, guess what those budget shenanigans have gotten us–a government shutdown that is costing the state millions of dollars each day and a lower credit rating that is going to substantially increase the cost to taxpayers when the state borrows money.

So let me get this straight–we shutdown our government and wrecked our state’s credit rating so that we wouldn’t have to raise taxes at the state level; but to offset the lack of revenue, local governments had to increase local property taxes.  Sooooo…we actually ended up with increased taxes anyway?!  That’s lunacy!  It is time to do the right thing–let’s raise enough in taxes to cover the hole in the budget and set ourselves on a more firm financial footing for the future.  It is the best way forward and it is the way we should have been moving all along.