The 18-month-old Minnesota Senate Building is a political gift that keeps on giving to Republican legislators. Its latest bestowal: ammunition for their dispute with DFL Gov. Mark Dayton over his line-item veto of funding for legislative operations.
If that veto stands, funds for debt service on the new Senate building won’t be available, GOP legislators say. Those funds are built into the Senate’s operating budget. This week, that argument was noticed on Wall Street. S&P Global Ratings placed the state’s AA+ rating for general obligation bond debt on “CreditWatch with negative implications” due to “a lack of clarity about how the rental payments and debt service will be paid.”
The situation has S&P taking a dimmer view of Minnesota’s money management. Even if the dispute between Dayton and the Legislature is resolved well before the next debt service payment on the building is due, on Dec. 1, the ratings service “would likely revise the outlook to stable rather than back to positive because this situation has illustrated a departure from what has been very strong budget management,” the service’s release said. It’s “not commensurate with higher rated credits,” it scolded.
That message is fresh reason for state courts to expedite a ruling on the lawsuit GOP legislators have initiated on the line-item veto, which Dayton intended as a means to compel the repeal of several provisions tucked into tax and spending bills enacted this year. It’s also reason for Dayton and legislators to continue to seek a resolution to their dispute apart from the courts.
The damage that would be done to legislative operations if the governor’s veto stands past July 1 goes well beyond the potential inability to pay the Minnesota Senate Building’s debt service. But a credit downgrade would sting, and not just because of the higher borrowing cost it would cause. Dayton has taken justified pride in restoring state government to fiscal health. It would be a shame if his own veto eroded its well-being.