Mississippi Credit Rating Takes A Hit

JACKSON, Miss. (AP) – A financial agency says Mississippi has a negative credit outlook because the state dipped into its rainy day fund to cover budget shortfalls.

Moody’s Investors Service says officials’ withdrawal of $108 million from reserves “further weakens the state’s financial position.”

The credit outlook, issued Monday, does not change Mississippi’s bond rating. But, state Treasurer Lynn Fitch said Tuesday that it’s a warning shot.

Moody’s estimates that Mississippi’s available rainy day fund balance has dropped to 1.4 percent of revenue for the budget year that ended June 30. Two years ago, the balance was equal to 6.7 percent of state revenue.

Moody’s notes that Mississippi had $65 million in budget cuts during the past year and that lawmakers approved a $415 million tax cut to be phased in over 12 years.