NEW YORK (CNNMoney)--Fitch Ratings downgraded ratings of debt Minnesota following a decision of Government of a budget dispute.
Fitch struck the state its pedestal at the triple-A level because of "problems to reach a consensus" to its budget gap for the fiscal year that began July 1. Fitch has also cited the "most contentious environment budgeting in the State in recent years."
The State has been shut down all but essential government services on 1 July, after the failure of the Governor Mark Dayton, a Democrat and Republican legislators to make peace in their budget dispute and a gap of $ 1.4 billion.
This caused parks of State to close throughout the day weekend of independence and triggered further layoff of 20,000 employees of the State.
The rating agency also highlighted dependency of budget Minnesota one-time fixes during the recession and the likelihood that any budget agreement contain several of them.
Fitch said the most important of these measures have been deferred payment to school districts and the use of funds from the federal stimulus program. The budget gap of $ 1.4 billion represents "school aid movements of payment used for the last biennium budget," said Fitch.
The rating agency now has a double-A-plus of Minnesota debt rating.
On a positive note, Fitch has commended Minnesota for its economy balanced with a market of labour "recovery". The Agency also said that the State has a position high debt with a debt burden that is at the bottom of the range moderate to about 2.7% of personal income."
-CNNMoney, senior editor Tami Luhby contributed to this report
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