Louisiana’s credit rating stabilized by Moody’s after bipartisan tax deal

Louisiana's bond rating has strengthened for the first time since the state's budget crisis was resolved during a Special Session that ended late last month.

Moody's Investors Service revised the state's rating outlook from negative to stable.

The state's overall rating remained Aa3.

Bond ratings determine how much it costs Louisiana to borrow money.

Moody's said it revised the rating after lawmakers passed and Gov. John Bel Edwards signed a 0.45-cent sales tax to offset what had been known as the fiscal cliff.

"Moody’s revised Louisiana’s outlook to stable because of the recent stabilization of the state's economic base and recurring, albeit time-limited, solutions to its large structural budget gaps," Moody's said in a press release. "We expect the state to continue to balance its budget with a preponderance of recurring actions but do not anticipate significant near- or medium-term improvements in its reserves, which will continue to fall short of a cushion commensurate with a volatile economic base."

The new sales tax expires in 2025.

“Today’s action by Moody’s validates what we’ve been saying about the need for budget stability,” Edwards said in a statement. "Thanks to the bipartisan compromise achieved during the last special session, Louisiana is no longer on the negative watch list.



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