Temporary taxes could hurt Louisiana's credit, but lawmakers still consider them
To improve its credit rating and save millions of dollars on construction projects, Louisiana must stabilize its fiscal situation. But some of the fiscal measures that the Legislature is considering won't be viewed kindly by the national agencies that set the credit rating.
State Treasurer Ron Henson said it is difficult to know exactly what tax and budget changes the national rating agencies want to see from Louisiana. But one thing is certain: "They do not like temporary revenue measures," Henson said Thursday (April 27).
Yet that hasn't stopped lawmakers from keeping temporary taxes, and the temporary removal of some tax exemptions, on the table in the current legislative session. They are trying to find a way to close a $1.4 billion hole that will be left in the budget when a number of temporary measures expire in July 2018.
All three of the big national credit rating agencies have downgraded Louisiana over the past 14 months. As a result, the state must pay more in interest to borrow money for roadwork and other projects. Before last year, the rating agencies hadn't downgraded Louisiana since 2005, in the months after hurricanes Katrina and Rita.