State of Louisiana Hit With Credit Downgrade

The Edwards administration's attempts to bring the Louisiana's budget in line were dealt a blow Thursday when the state's credit rating was downgraded.

The decision by Moody's Investors Service to drop the state's credit rating is another blow to a state on the edge of budget instability leaving higher education and government services on financially shaky ground.

The move comes as Louisiana's lawmakers are meeting in a special legislative session to increase state revenue.

The credit rating agency dropped the state's rating by one notch, citing  the dropping price  of oil price's effect on state tax collections and declining financial reserves. It also puy emphasis on growing cost of the state's Medicaid program, which Governor Edwards expanded just days after taking office.

Edwards termed the downgrade disappointing, and placed the blame on the years of bad budgeting by the Bobby Jindal administration.