Louisiana has taken another financial hit, with a second national rating agency downgrading the state’s credit rating.
Saying the state has relied on "overly optimistic" revenue projections for one-time budget fixes, Fitch Ratings downgraded the state by one notch Tuesday.
The decision comes only days before Louisiana planned a general obligation bond sale to finance construction projects. The borrowing could become more expensive with the rating downgrade. Ratings from the credit agencies help determine interest rates on borrowing.
It’s the second rating drop within two months. Moody’s Investors Service downgraded Louisiana’s credit rating in February.
Gov. John Bel Edwards met with the rating agencies last month to try to reassure them that he and lawmakers are working to stabilize Louisiana’s finances after years of budget problems.
But even after a recent round of tax hikes, Louisiana still faces deep shortfalls.
Read more about the implications of the downgrade in this nola.com story.