September 18, 2019

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Latest News, Louisiana

Then/Now: Moody’s Upgrades Louisiana’s Credit Outlook To “Positive,” Way Up From “Negative” Rating In Jindal Years

Gov. John Bel Edwards has turned Louisiana’s budget crisis around from the failed Jindal era and one credit agency is taking notice. During the Jindal years, Louisiana had a $2 billion budget deficit and its credit outlook slipped from “stable” to “negative.” Thanks to Gov. Edwards’ bipartisan leadership that turned Jindal’s deficit into a surplus, Moody’s Investors Service just moved Louisiana’s credit outlook from “stable” to “positive.”

THAT WAS THEN:In February, two national rating agencies — Moody’s Investors Service and Standard & Poor’s Rating Services — moved the state from a ‘stable’ to ‘negative’ credit outlook even after state officials sought to reassure them about Louisiana’s financial condition.

The rating agencies raised concerns about the short-term patches Jindal and lawmakers have used to balance the budget, maneuvers that have created annual budget shortfalls.” [AP, 7/5/15]

THIS IS NOW:  “A national credit rating agency is giving Louisiana good marks for its improved financial outlook and its work to stabilize the state budget.

Moody’s Investors Service changed Louisiana’s credit outlook from ‘stable’ to ‘positive.’ The firm said that’s an indication Louisiana could see a rating upgrade in a year or two.

[…]

Moody’s says Louisiana has improved its financial position by closing budget gaps with ongoing revenue sources, rather than patchwork funds. The rating agency says the state’s economy also has stabilized.

The news comes as Democratic Gov. John Bel Edwards is running for reelection, touting the seven-year tax deal he and lawmakers reached in 2018 to end years of budget uncertainty.” [AP, 9/17/19]