Fitch Ratings downgraded Minnesota's debt ratings in the wake of a government shutdown stemming from a budget dispute.
Fitch knocked the state off its triple-A rating pedestal because of its "difficulties in reaching consensus" on its budget gap for the fiscal year that began July 1. Fitch also cited the "increasingly contentious budgeting environment in the state in recent years."
Republican lawmakers failed to make peace over their budget dispute and fill a $1.4 billion gap. They're fighting over whether to raise taxes or cut spending.
This caused the state parks to close down throughout the Independence Day weekend and triggered layoffs of more than 20,000 state employees. Road construction projects are on hold and highway rest stops are shuttered.
The rating agency also highlighted Minnesota's reliance on one-time budget fixes during the recession and the likelihood that any budget accord will contain more of them.
