At least one major credit rating agency has taken notice of our state Legislature’s inability to perform even the simplest task.
And the results are not good.
“In our view, political risk -- as evidenced by the legislative gridlock during the special session -- has emerged as a credit weakness, which has the potential to stunt what otherwise has been recent positive momentum in the state,” analysts from Standard & Poor’s wrote in Wednesday’s assessment. “While over the short term, we anticipate continued modest improvements in economic and fiscal trends, uncertainty about fiscal 2019 now looms over Louisiana. As the legislature and governor work to find a path forward in crafting the state’s next budget, we will continue to assess whether any measures provide for a sustainable framework to maintain long-term structural balance.”
And right now, those prospects look pretty dim.
The Legislature and governor had a complex but clear problem: The state faces an impending budget crisis when $1.3 billion in temporary taxes expire at the end of the current fiscal year in June. The state must trim its spending, increase its tax revenue or apply a combination of the two.
What our officials did, though, was nothing. After a nearly two-week special session that wrapped up last week, we are no closer to solving our fiscal problems.
As is the case in many partisan stalemates, each side has consistently blamed the other, all the while failing to craft any sort of compromise that gets the state where it needs to be.
And Standard & Poor’s comments this week come just one year after it downgraded Louisiana’s credit rating.
The real-world impact of this might be a bit difficult to imagine, but it does exist. The state’s credit rating affects the rate at which it can borrow money.
But the symbolic significance is also poignant.
The fact that our politicians cannot even work together to solve such a pressing problem is certainly troubling to those who would prefer to see Louisiana be able to balance its books.
Even worse, it gives little hope that the state will be able to pursue the long-term reforms that could make fiscal crises like the present one less common.
Standard & Poor is just doing what our state’s leaders have made common sense: losing hope in Louisiana’s ability to put its financial house in order.
Editorials represent the opinion of the newspaper, not of any individual.