Minnesota on Stable Economic Outlook
ST. Paul, Minn. – On Tuesday July 30, Minnesota Management & Budget Commissioner Jim Schowalter announced that Moody’s Investors Service, a national rating agency, had revised Minnesota’s financial status from “negative” to “stable” outlook. Moody’s had placed Minnesota on negative watch in August 2001 and had downgraded the state’s bond rating from AAA to Aa1 in 2003.
“Moody’s revised rating outlook positively reflects the legislature’s budget work this year,” said Senator Roger Reinert (DFL-Duluth). “We entered session with a commitment to stabilizing Minnesota’s budget honestly and for longer than just the next biennium. This week’s report indicates our solutions are working.”
The Minnesota Department of Revenue also released new information Tuesday showing that property taxes statewide are projected to decrease for the first time since 2002. Increased aid to local governments, sales tax exemptions for cities and counties, and direct property tax refunds for hundreds of thousands of homeowners and renters are projected to decrease property taxes next year by an estimated $121 million, or 1.5 percent.
Sen. Reinert chief-authored this year’s legislation providing an $80 million increase to Local Government Aid and a simplified LGA formula. “During the five years I served on the Duluth City Council, I saw firsthand the disconnect between our city’s need and the aid the state provided,” Sen. Reinert continued. “The LGA increase and formula change passed this year helps repair that disconnect and alleviate the decade-long property tax increase on Minnesota homeowners and businesses.”
Specifically, Duluth will receive a 5.8 percent boost in LGA. When combined, increased aid to local governments and property tax refunds result in a 4.1 percent decrease in 2014 countywide property taxes for St. Louis County.
“Both Moody’s revised outlook and the property tax relief information released this week show Minnesota’s financial management is headed in the right direction,” concluded Sen. Reinert.