By MELINDA DESLATTE
BATON ROUGE, La. (AP) - Louisiana's credit rating has been downgraded, after years of budget instability that leave public colleges and government services wallowing in repeated financial uncertainty.
The decision by Moody's Investors Service to drop the state's credit rating Thursday is another blow to a state teetering on the edge of financial calamity.
And it comes as Gov. John Bel Edwards and lawmakers are grappling in a special legislative session with balancing the budget.
Ratings from the credit agencies help determine interest rates when the state borrows money, through bond sales to investors. A drop in a state's credit rating raises interest costs, making it more expensive to borrow.
Former Gov. Bobby Jindal and lawmakers refused for years to match the state's spending to its annual tax income, continuing cycles of budget gaps.
Edwards released the following statement in response to the downgrade:
"This is a disappointing development, particularly since we believed that Moody's would wait until the conclusion of the special session to make any decision on our rating. Unfortunately, the downgrade confirms what we've been saying about the structural imbalance of our budget. The overuse and abuses of one time money and fund sweeps by the Jindal Administration were a major factor in this decision. It also reflects the global concern about the decline of oil prices and its impact on producing states. It is more important than ever for the legislature to work with me during this special session to stabilize our budget and repair the damage of the last eight years. We can do this by transitioning to a new tax structure that conforms to best practices promoted by organizations such as the Tax Foundation, which will help us achieve long term fiscal stability and predictability in Louisiana."