The State of Minnesota has again received the highest-possible Triple-A credit rating from two major agencies, Fitch and Standard-and-Poor’s, and officials hope for a similar rating soon from Moody’s. State Management and Budget Commissioner Myron Frans says it translates into dollar savings when Minnesota sells bonds — at under three percent interest for the last several years. He says, “These kind of rates really make it very affordable for a state government like Minnesota to invest in infrastructure projects.”
Frans says a “very strong positive” with the rating agencies has been the size and growth of the state’s “rainy day” budget reserve — now just over two billion dollars. He acknowledges there’s always legitimate pressure to raid the reserve, but “I recommend to the governor and to the legislature pretty much all the time that,… even though we have other problems we want to solve, we should not touch the reserve except for an economic downturn.”
Frans says the budget reserve is not designed as a cushion against another “Great Recession”, but can get the state through a two-year budget cycle during a more typical economic downturn.