Updated: 08/01/2011 03:17:12 PM CDT
ST. PAUL, Minn. - One of the major rating agencies is taking a gloomier outlook on Minnesota's financial future, citing "political intractability" and the lack of a permanent fix to persistent deficits.
Moody's Investors Service today lowered its outlook for the state to "negative" from "stable," but didn't change the state's second-highest credit rating.
Minnesota endured a 20-day government shutdown last month. State leaders ended up agreeing to delay school payments and borrow from a stream of legal payments from tobacco companies to end the standoff and erase a $5 billion deficit.
Fitch Ratings cut its top rating for the state's credit by one notch during the shutdown.
Moody's analysts say the politics of Minnesota's divided government has led to one-time budget solutions that make future deficits more likely.
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