Governor Tim Walz announced today that Moody’s Investors Service, S&P Global Ratings, and FitchRatings have all affirmed Minnesota’s AAA credit rating and stable outlook, the agencies’ highest possible mark. This is the fifth consecutive year all three rating agencies have provided AAA credit ratings for Minnesota, underscoring strong confidence in the state’s fiscal management, economic outlook and responsible budgeting practices.
“Even while federal actions create national economic uncertainty, Minnesota’s economic stability and sound fiscal management maintain the confidence of America’s top rating agencies,” said Governor Walz. “Making smart fiscal decisions is a hallmark of how we’ve governed. Balancing our state budget, reducing the structural imbalance, maintaining ample reserves, and prioritizing investments in Minnesotans have made this state the best place to live, work, and raise a family.”
The AAA rating is the most rigorous and prestigious among the major credit agencies. Minnesota is one of only 14 states nationwide that currently hold this rating, underscoring its status among the best-managed states in the country. Strong credit ratings help keep the cost of state borrowing low.
“I want to thank Governor Walz for sitting down personally with the rating agencies to discuss what makes Minnesota a truly exceptional state, and the many actions policymakers have taken to keep our state strong, resilient, and well-positioned to weather economic uncertainty,” said Minnesota Management and Budget Commissioner Erin Campbell. “We have worked hard to create responsible budgets that maintain our state’s fiscal integrity while also making strategic investments and public policy decisions that will keep Minnesota competitive. I am grateful for the leadership the governor and legislative leaders have demonstrated to make this a reality.”
Fitch Ratings credited Minnesota’s AAA rating to, “the state’s healthy economy, low long-term liability burden and strong operating performance supported by prudent reserves and highly effective budget management.” The rating agency noted, “Minnesota’s finances have shown significant resilience through economic downturns, and the state has demonstrated a strong commitment to bolstering its reserves during recoveries,” while stating, “Fitch expects the state’s economic trajectory to support strong revenue growth prospects.”
Moody’s Investors Service stated that the AAA rating, “reflects Minnesota’s very strong reserves, modest long-term leverage, and the deep fiscal flexibility that will allow it to absorb economic and federal-policy pressures over time. The state’s credit strength rests on structural advantages that we expect to persist: a diverse, high-income economy with above-average labor force participation, low leverage from debt, pensions, and OPEB relative to state medians, and a proven governance framework built on frequent forecasting, automatic reserve deposits, and broad budget-balancing capacity.”
S&P Global Ratings said in affirming Minnesota’s AAA rating, “The ‘AAA’ GO rating reflects our view of the state’s robust financial management framework, its actions to manage the out-year structural budget gap and maintain a strong balance sheet, its favorable economic profile and good medium-term performance prospects relative to those of other state peers, and its conservatively managed debt and liability profile with well-funded pensions and limited fixed cost exposure.”
