Minnesota gets AAA rating from Moody’s for first time in nearly 20 years
"Careful fiscal management, a diverse economy, record low unemployment, and strong financial reserves put us at the threshold of what relatively few states have, AAA bond ratings across the board,” said Gov. Tim Walz.
ST. PAUL –For the first time since 2003, Moody’s has rated Minnesota as AAA, the highest rating achievable. In a separate release, Standard & Poor's (S&P) confirmed its AAA rating for Minnesota as well.
Moody’s has upgraded its rating for Minnesota from Aa1 to AAA. This matches the rating established and maintained by Standard & Poor’s. Fitch most recently rated Minnesota AAA in 2021 and will issue its current assessment soon.
“Minnesota is in a strong financial position," Gov. Tim Walz said in a news release. "Getting upgraded by Moody’s is an incredible achievement at any time and particularly on the heels of a historic pandemic that has created uncertainty in the global marketplace. Careful fiscal management, a diverse economy, record low unemployment, and strong financial reserves put us at the threshold of what relatively few states have, AAA bond ratings across the board.”
Moody’s credited its upgrade to “a track record of prudent governance that has driven growth in financial reserves and strong management of long-term liabilities, such as improved pension contributions, that will keep Minnesota’s leverage and fixed cost burdens among the lowest of all US states.”
Also supporting the rating are, “strong, long-standing economic fundamentals including above average incomes, a diverse industrial mix, high levels of workforce participation, and low unemployment rates.”
“We’ve all been through a stress test, and we did great,” said Minnesota Management and Budget Commissioner Jim Schowalter. “Sound budgeting practices, smart financial investments and moderate debt levels have helped put Minnesota on sure footing to face whatever national economic headwinds come our way. Across-the-board top bond ratings will help keep the cost of borrowing for future investments in Minnesota as low as possible at a time when interest rates are rising.”
In affirming Minnesota’s AAA rating, Standard & Poor’s cited the state’s deep and diverse economy, history of strong financial results, moderate debt levels, and ability to raise revenues and reduce or defer expenditures to maintain a balanced state budget.