Today, Governor John Bel Edwards released the following statement on the announcement that Moody’s Investor Services placed 8 Louisiana universities on the watch list for credit downgrades:
“Over the last eight years, Louisiana’s higher education institutions have faced the largest disinvestment in the country,” said Gov. Edwards. “Now, faced with the largest budget deficit in our state’s history, further cuts will be necessary if the legislature will not work with me to bring in additional revenue. We cannot continue to chip away at funding for higher education and expect them to have the ability to invest in our children’s education. This announcement should serve as a wakeup call for anyone who thinks we can simply cut our way out of this crisis, and I am hopeful this will bring folks to the table to work with me to avoid making these cuts that will have a negative long-term impact on higher education in this state.”
According the Moody’s announcement, “The action reflects looming state funding cuts, including an unexpected contraction in state scholarship aid. Funding cuts implemented more than halfway through FY 2016 limit the universities' financial flexibility to adjust revenue or expenses, as spring term enrollment and student charges have been established. The uncertainty for FY 2017 state funding may adversely affect enrollment, as decisions on the state budget, including scholarship availability, will coincide student choices for fall 2016.”
The eight universities placed on the watch list include:
Louisiana State University: A1 (Debt)
University of New Orleans Research and Technology: A2 (Debt)
University of Louisiana at Monroe: A2 (Issuer)
LSU Health Sciences Center in New Orleans: A3 (Debt)
Louisiana Tech University: A3 (Debt)
Southeastern Louisiana University: A3 (Debt)
McNeese State University: A3 (Debt)
Southern University System: Baa2 (Issuer) Baa3 (Debt)
The complete announcement from Moody’s is available here
Along with the state’s healthcare system, Louisiana’s higher education has taken quite a wallop over the course of the eight years under former governor Bobby Jindal and the then-legislature.
Unquestionably, so far, the most controversial issue coming out of the Louisiana's extraordinary special session so far has been the fate of higher education and the state's brand new governor, Jon Bel Edwards' comment regarding university football possibly being shuttered next year due to major budget woes.