U.S. states’ credit ratings are threatened as turmoil in credit markets pinches finances and an economic slowdown crimps revenue, Moody’s Investors Service said. Moody’s has a negative outlook on six states — Florida, Kentucky, Nevada, Ohio, Rhode Island and Wisconsin — while its outlook on state credit overall has been negative since April, according to a report released Tuesday.
Colorado, Wyoming, Alaska, Louisiana, New Mexico and Texas are faring better because they are less dependent on financial services and have higher revenue from oil, natural gas and other commodities, Moody’s said. These states also didn’t see their housing markets appreciate as much as other states.
Sales-tax revenue, which generates about a third of general fund revenue for states, is expected to fall as consumers cut spending, according to Moody’s. Income-tax revenue also will likely decline because of “sagging personal income.” Bloomberg News
