To the editor,
Minnesota’s diminished bond rating is one of the lingering impacts of recurring budget shortfalls we encountered the last four years under the previous administration; it now costs us more to borrow money.
All of the three big rating firms have downgraded Minnesota from the stellar AAA rating we used to have. Short-term solutions like tapping our reserve accounts and delaying payments have put black marks on our credit. Now – just as with consumer credit – our reduced rating means we will have to pay higher interest rates to fund things like capital investment projects. The interest cost paid by cities, schools and other entities who borrow based on the state’s credit rating could also increase.
In other words, budget gimmicks of the past can place additional financial burdens on taxpayers.
The good news is the nearly $900 million in “new” money from the state surplus projected last November will go to replenishing our reserves. If this uptick continues, we can turn our attention to paying back shifted K-12 education funds. These prospective developments would help us to restore our credit rating, but there is a lot more we can do.
Our mission in the 2012 session is to continue driving fiscal responsibility. New methods of setting our state budget, increased transparency for state spending and the elimination of wasteful government practices are under consideration at the Capitol. We became lax in some of these areas over the years – when our state was flush with cash – but our new economic era demands we redouble our efforts.
It will take time and commitment to get our ratings back to what they once were, but we must stay the course and continue working for long-term stability. We have been warned, now it is our responsibility to act accordingly.
Rep. Glenn Gruenhagen