Estimated read time: 2-3 minutes
This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
BATON ROUGE, La. (AP) — With deep budget cuts dodged by Louisiana's public colleges, national credit rating agency Standard & Poor's has removed five higher education institutions from a negative credit watch.
Gov. Bobby Jindal's administration announced the credit decision Wednesday. The move by S&P indicates the institutions aren't facing the short-term possibility of a rating downgrade.
"Obviously this is good news for us, great news for higher education," said Jindal's commissioner of administration, Kristy Nichols.
S&P's decision affects Nicholls State University, the University of Louisiana at Lafayette, the University of New Orleans Research Foundation, LSU's Bogalusa Community Medical Center Project and the Delgado Community College Foundation.
The credit agency had put the institutions on a negative watch in April, as higher education was threatened with hefty slashing because of state budget problems. But lawmakers scaled back tax breaks and raised taxes to avoid the cuts, giving colleges a largely standstill budget this year.
The Jindal administration hopes the decision announced for the higher education organizations is the harbinger of good news for the state, which is awaiting word from the national credit rating agencies about its own status.
"This has to be an indication that we made the right strides," Nichols said.
Rating agencies have raised concerns about the state's long-term finances and patchwork budget maneuvers, which lawmakers reduced in the most recent legislative session.
A decision on whether Louisiana made enough progress to escape a lowering of its credit rating should come within weeks, as the state readies for its next round of borrowing through a bond sale to investors.
Ratings from the credit agencies help determine interest rates. A drop in a state's credit rating raises interest costs, making it more expensive to borrow money.
Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
