BATON ROUGE – A national credit rating agency says Louisiana has a “structural deficit” in its budget that has been worsened by falling oil prices.
Moody’s Investors Service, which tracks state financial issues and issues credit ratings that determine interest rates, issued a credit outlook update Monday on Louisiana.
Treasurer John Kennedy called the write-up a “warning shot” that the rating agency is closely following state budget troubles to determine if its credit rating should be downgraded.
Moody’s looked at Louisiana’s $1.6 billion budget shortfall for the fiscal year that begins July 1. Most of the shortfall is tied to the use of patchwork funds in the budget that are slated to disappear. The problem has been deepened by the oil price drop.
Moody’s said balancing next year’s budget will be “especially challenging.”
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