CHICAGO – Minnesota lost its final triple-A rating Friday when Standard & Poor’s lowered its rating one notch to AA-plus as it chided the state for its continued reliance on one-time financial maneuvers to deal with its budget deficit.

The state’s diminished reserve levels will make it all the harder to balance the next budget as the benefits of the one-shots that helped eliminate a $5 billion deficit end. “The downgrade reflects what we view as the state’s ongoing reliance on nonrecurring measures to balance its budget, which we believe will contribute to continued structural imbalance,” wrote analyst Robin Prunty.

The downgrade affects $5.1 billion of general obligation bonds and comes ahead of the state’s competitive sale Tuesday of $920 million of new-money and refunding GOs. Standard & Poor’s assigned a stable outlook to the rating at the lower level.

Moody’s Investors Service in early August revised its outlook on the state’s Aa1 GO rating to negative from stable and affirmed that status on Friday. Fitch Ratings in July downgraded the state to AA-plus from AAA and assigned a stable outlook. It affirmed the rating on Thursday.

Gov. Mark Dayton in July signed into law the final bills that made up the two-year $35 billion budget, ending a 20-day shutdown that began when the new fiscal biennium started without a budget in place. Dayton, a member of the state’s version of the Democratic Party, sought an income tax increase on top earners, but Republicans, who control the Legislature, refused.

Cuts made up about 46% of the overall budget solution while one-time maneuvers accounted for the remainder. They included $640 million from the sale of tobacco bonds and delaying $2.1 billion in school payments. Minnesota has nearly depleted its once-healthy reserves, drawing them down to around $275 million.

Minnesota Management and Budget Commissioner Jim Schowalter in a statement called the rating action a “direct result” of the budget and warned of higher costs in a message likely directed at lawmakers. “Unfortunately, we are no longer a triple-A state. Their assessment confirms what we all know — that we need to fix the state’s budget problems so that we don’t have large and recurring budget deficits. We also need to restore our reserves and pay back shifts.  It will take time and commitment to get our ratings back,” Schowalter said.

Standard & Poor’s said the state’s current rating is supported by its modest debt levels, solid debt management policies, a diverse economy, and track record of adjusting its budget to meet revenue forecasts. “This will be an important credit consideration in the next several years, in our opinion, given the state’s diminished financial flexibility,” analysts noted.

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