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.[jump]
Fitch, in downgrading Minnesota's rating Thursday, noted the state's "reliance on non-recurring gap-closing measures over the course of the recession."
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.
- Tim Pawlenty brags about shutting down Minnesota in new campaign video
- Minnesota state senators not accepting their shut-down salary: The full list
- Minnesota state representatives not accepting their shut-down salary: The full list
- Dayton will refuse salary during shutdown
- Minnesota shut down: Who's to blame?