Moody’s Investors Service Inc. of New York lowered the outlook of five states with triple-A bond ratings -- Virginia, Maryland, New Mexico, South Carolina and Tennessee -- in July, partly because of their dependence on defense and other U.S. government revenue, said Bob Kurtter, Moody’s managing director of U.S. public finance.
“Any state or local government that has a significant federal presence is asking that question: Are they vulnerable?” Kurtter said.
Perhaps no state has more at stake than Virginia, which hosts the country’s largest naval base in Norfolk and is home to five of the Navy’s 11 aircraft carriers.
But mostly in the sunny warm regions:
Minnesota ranked 51st among the states and the District of Columbia, with defense spending accounting for 1.1 percent of its gross domestic product. The Defense Department spent $2.8 billion in the state in fiscal 2009, including $1.5 billion in contracts benefiting companies such as Lockheed Martin Corp. (LMT) of Bethesda, Maryland, BAE Systems Plc (BA/) of London, and General Dynamics Corp. (GD) of Falls Church, Virginia. Bloomberg
Minnesota is my favorite state, yet the poor folks suffer high losses in their relationship with DC spenders.
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